Navigators (market of Russia)

2012: Reduction of prices in mature market

Sales of GPS navigators in Russia from August, 2011 to August, 2012 grew approximately by 17% year-on-year, said in the report of GFK company. In total about 1.33 million such devices were sold for this period in Russia.

For the first half of the year 2012 growth of the Russian market was about 15.4%. For the same period in Western Europe the market of personal navigation devices "sank" for 20%. GFK provided such data during the IFA exhibition in Berlin in September, 2012.

Distribution of forces of the leading players in Russia for reporting period remained stable. The most part of year the market leader was Explay, except for the period from December to February when Prestigio companies were possible to be ahead of her a few.

According to GFK, in August, 2012 the share of Explay in the Russian market of navigators made 28% against 26% at Prestigio. The third largest player analysts call Garmin from shares in 11%.

For the reporting period the average price on the GPS navigator in Russia fell for 10 euros, and in August, 2012 it made 89 euros, analysts counted. Since the beginning of 2011 the average price fell to 18 euros.

At Russians navigators with the diagonal of the display of 5 inches enjoy the greatest popularity – about 65% of the sold devices in August, 2012 were the share of them. And at the same time their share and also a share of devices with larger screens, steadily grows. As for navigators with the screen less than 4 inches, from the report of analysts it is possible to tell that they already almost "died out"^[1].

The cost of navigators falls as now there is a market compression: GPS and cards are available now and in other devices – smartphones, the size of the screen of many which was already equal to the size of the screen of navigators, the CEO of Explay Eduard Vashchenko believes.

By its estimates, the level of penetration of navigators among car owners in Russia is already rather high. At the expense of it and also distribution of mobile devices with navigation, it is possible to expect deceleration of growth rates of sales of navigators in Russia, Vashchenko says.

The product manager of Prestigio Alexander Martirosov notes that reduction of prices of navigators came to Russia from Asia where the majority of these devices is made. As it is already possible to call this market mature, it is necessary to reduce the price of navigators to support their sales, he says.

Unlike the colleague from Explay, Martirosov does not consider that smartphones and tablets with GPS have a noticeable impact on the market of navigators: instead of the last they are used by small percent of motorists, navigators win on a form factor so far, he believes.

2011

According to the analytical agency GFK, in 2011 the Prestigio company won first place by the number of the sold GPS navigators with the general share in 24%, and in December, 2011 this indicator was 27%. According to the SmartMarketing groups, the share of Prestigio at the end of 2011 reached 29%. In total according to calculations of SmartMarketing in 2011 in Russia 1 million 515 thousand portable GPS navigators were sold (in 2010 - 1 million 241 thousand, i.e. in a year the market grew by 22%.)

2009

According to the results of the 1st half of 2009 in Russia 306 thousand navigation devices taking into account devices of all types and categories were sold, including the smartphones and communicators equipped with GPS receivers (but not including the built-in navigators). At the same time 109 thousand autonavigators were sold (PND, 35.6%); 195 thousand smartphones, communicators, the CPC and Internet tablets with the built-in GPS navigation (63.7%). Other mobile devices (for example, trackers) dispersed from GPS navigation number approximately in 2 thousand units (less than 1% of a total quantity). Such data are provided by Smartmarketingdolya analytical company ^[2].

In numerical expression in comparison with the 1st half of 2008 the market almost did not change (minus 2%). For designation of the market of smartphones, communicators, the PDA and Internet tablets with the built-in GPS receiver of analytics SmartMarketing use GPS-WID abbreviation. This sector showed decline approximately by 15% in comparison by the 1st half of 2008. Whereas the segment of PND (Personal Navigation Device — personal navigation devices) grew approximately by a third.

"The market of GPS devices in the 1st half-year 2009 developed predictably — the marketing manager of SmartMarketing Svetlana Zavyalova tells. — The crisis phenomena did not lead to growth of sales volume. Nevertheless, by the end of the period also separate positive trends began to be shown. In general crisis significantly urged on development of all those processes which were outlined in the market at the end of last year, from which main thing should be considered the continuing demonopolization and growth of the competition in PND sector".

2008

According to a research of Frost & Sullivan company, in 2008 in the Russian market 450 thousand units of navigation products were sold, from them 350 thousand are smartphones.

According to the analyst Maxim Fadeyev, assessment of Frost & Sullivan is significantly underestimated. According to it, only in the 1st quarter 2008 only by two companies - E-TEN and HTC - is sold about 120 thousand devices from which GPS are equipped about 100 thousand. "To this digit it is necessary to add autonavigators (last year about 450 thousand devices of all brands were sold) and phones with the built-in GPS for completeness of statistics though very few people use them", - he commented. Market size in piece expression, by Fadeyev's estimates, in 2008 was 700-800 thousand units.

"Data of the specified research poorly reflect a real situation in the market. I do not understand from where these digits are taken", - the vice president Vobis Kompyuter Victor Lopatin confirmed. According to him, only Vobis for last year implemented 200 thousand devices with navigation, at the same time the company occupies about 20% of the market. Proceeding from these digits, its total volume is equal not less than 1 million devices.

Market leaders

According to the results of the first half of the year 2009 entered into top ten of the market of PND:

• Garmin (21,4%),
• Explay (18,5%),
• Mio (10,6%),
• JJ-Connect (8,3%),
• Prestigio (4,5%),
• Nexx (3,5%),
• Shturmann (3,0%),
• Texet (2,8%),
• TomTom (2,7%)
• Mapitan (2,4%)

Among trends experts note loss from ten of Voxtel owing to turning of activity by the company in the market of GPS (right after the end of the reporting period, on July 1, 2009, Voxtel and Explay announced merge). Noticeable deterioration in positions of Garmin is caused by price policy not quite adequate to crisis conditions and a low performance of marketing.

The biggest falling of a market share — at Mio, with loss of the second place in the list of vendors of PND. Such results are caused, first of all, by global problems of the company (recession of sales and restructuring of business on a global scale) therefore there were difficulties in interaction with a distribution channel in Russia and noticeable decrease in marketing activity. Sharp growth of a share of Explay (in comparison with 2008) is connected with good representation of the brand in some large retail canals and also aggressive price policy.

Top ten of a GPS-WID segment according to the results of the 1st half of 2009 looks as follows:

• Samsung (23,1%),
• Apple (22,4%),
• Nokia (16,9%),
• HTC (11,5%),
• Gigabyte (5,5%),
• Sony Ericsson (5,1%),
• RoverPC (3,6%),
• Asustek (2,9%),
• Mio (2,7%)
• Acer (2,6%).

Noticeable decrease in a market share of HTC, one of leaders (at the end of 2008) vendors of WID-GPS, is caused by common problems of sales of products of the company in crisis conditions. From indicative trends It should be noted noticeable reduction of market shares of Asustek and Acer. In the first case, in addition to the natural reasons connected with crisis it is caused by almost total absence of any activity in the market waiting for reorganization of GPS-WID of business after conclusion of an agreement with Garmin. In a case with Acer reduction of a market share is caused, along with crisis, the proceeding problems of reorganization of business after E-Ten purchase.

GLONASS device

The share of the GLONASS devices in the first half of 2009 was reduced practically to zero — to the only navigator more than 1.5 years, there is nothing new in this segment of the market. New models are expected only by the end of 2009, but as problems of release competitive to GPS analogs (on TTH and the price) the GLONASS receivers it is not solved, and new products of GLONASS prepare, generally the companies working at the non-commercial market, it is not necessary to expect any significant demand for the specified new models, experts say.

Trends

Replacement of navigators by smartphones

As for a trend of replacement by smartphones of traditional navigators about which tells Frost & Sullivan, according to participants and experts of the market, it takes place rather in Europe, than in Russia, Fadeyev also speaks. "Our market goes a bit different way. Having started for 7 years later European, the Russian market of navigators has longer history of development: the bigger number of ordinary consumers (not fans) managed to get used to autonavigators. On transition to more functional devices time is necessary", - he considers.

"Smartphones with navigation are convenient to more pedestrians, and traditional navigators it is more convenient for motorists thanks to the bigger size of the screen, convenient fastening. Therefore it is quite difficult to say that smartphones are forced out by navigators", - the director of large federal retail network said about it.

Decrease in demand for expensive models

The only negative market trend provoked by crisis which is noted in Frost this decrease in demand for expensive models of devices, but also it was disputed by independent experts.

According to Mikhail Fadeyev, it not absolutely so. "Landslide reduction of price of navigators to the level of 3-4 thousand began with the level of 7-8 thousand even last summer, i.e. before crisis. Also it was connected only with the fact that entrance thresholds of an output to the market of new brands were rather low, and people had a lot of money. So in China and the countries of Southeast Asia there were tens of the companies which were "splashed" by navigators as hot pies", - he says. "This trend arose even before crisis. The amplified competition really quickly enough, but considerably "dropped" the average price on devices", - Victor Lopatin says. "There are very thorough doubts in objectivity of this research", - he summarized.

Forecasts of market development

When preserving the current trends of development preserving of growth rates of a segment of PND at the level of 2008 is possible. By SmartMarketing estimates, it is possible to predict total sales in 2009 in the absence of macroeconomic shocks at the level of 300–330 thousand PND and 600–800 thousand GPS-WID-devices. The sales volume of PND can decrease in case of implementation of a number of the initiatives connected with taxation of import of GPS navigators for the purpose of support of the Russian developers of systems based on GLONASS.

Regarding forecasts of market development of PND it is necessary to consider the fact of increase of dissociation, analysts note. Further weakening of the position of the most part of vendors of the first five because of cardinal change of a macroeconomic situation and gain of the competition from some brands of the second echelon which business models are better adapted for new conditions is expected. Thereof the rating of the PND brands, on SmartMarketing expectations, can change considerably: disappearance probability from top-10 to a half of the players who are present at it is high.

Analysts also expect that in a GPS-WID segment the market share of players with the greatest marketing activity, in particular, of Apple, Samsung and Nokia will continue to increase (in two last cases at the expense of the continuing expansion of a product line GPS models). It is possible to expect also further decrease in a share of traditional players of the market of communicators owing to problems with sales channels, decrease in marketing activity, partly — not always price policy adequate to conditions of crisis.

Notes