To Summarize

Pricing for GPS products dropped by 15% in February 2007, compared to the same period last year. The average price of GPS products is now $433. Different Manufacturers Reflect Wide Price Range: Current actual pricing data reveals the following average price ranges for all GPS products by manufacturer: $500 average price range - Garmin $400 average price range - TomTom, Magellan, and Lowrance $200 average price range - Mio and ViaMichelin Garmin Stays Ahead of the Pricing Curve: The GPS market is still considered a niche market. Although Garmin reaches the high-end consumer, offering GPS products in the average price range of $500, 70% of the most popular GPS products listed are Garmin products. From a channel perspective, this may have to do with the fact that Garmin has literally dozens of product offerings, compared to TomTom's 11 and Mio's four. This wide selection not only gives consumers more options, it also gives Garmin a higher profile on consumer shopping web sites. It can also give consumers the impression that, because the company is more visible, that its products must be superior. Downward Trending of Prices May Continue: With the onset of lower priced products introduced by Mio and viaMichelin, increased pricing competition should occur between manufacturers. This will lead to further downward trending in pricing for GPS products, as more manufacturers realize the benefits of targeting mainstream consumers at low-end price points. It will also bring more GPS products into the channel.

Conclusion

GPS products have yet to hit the mainstream market. Pricing on GPS units is falling gradually, but the market as a whole remains a niche market with the average price in February 2007 still at $433. A lot of emphasis has been placed on offering an all-in-one product that includes a digital entertainment system such as music playback, image viewing and storage, and GPS-enabled handsets. People must be looking for the "Swiss army knife" of GPS.

As manufacturers roll out newer models, just as much attention will likely be focused on targeting the mass market through lower price points. As mentioned earlier, higher sales seem to bring on lower prices, much as they did in the cell phone market. And, as with the cell phone market, lower prices will bring more demand for GPS units, which will bring more products into the channel, which will bring on lower prices and customers in a sort of snowball effect. Manufacturers such as TomTom, viaMichelin, and Mio are offering GPS models with lower prices to attract a wider consumer range. Substantial price drops in 2007 for GPS products are expected, with the introduction of newer low-priced models and discounted prices on older models to draw an active channel for GPS products.

Maps may soon be a thing of the past, but one thing is certain despite technological advances: no matter where you go, there you are.

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