Future for GPS Chip Makers Uncertain

Manufacturers that pioneered the development of GPS chips for the civilian market face an uncertain future; one that may include merging or being bought by larger integrated circuit (IC) manufacturers according to a new report released today by ABI Research. "The market for GPS semiconductors has reached a plateau," according analyst Dominique Bonte. "All GPS chips offer similar performance. That tends to make market success primarily a matter of price, and of ease of integration with the host devices."

Another issue pressuring GPS chip makers is the growing trend towards combining GPS with other functions on a single chip. Integrating GPS with Bluetooth is all the rage these days. Wi-Fi is next on the list for integration.

The London-based market research firm says that these trends mean that that the very large semiconductor players will ultimately take the lead in the GPS market. Among the big players' advantages:

• Economies of scale that can reduce the cost of GPS-enabled ICs.
• Greater abilities to integrate multiple radio frequency technologies in a single unit.

ABI says we can expect to see firms like Broadcom, Atheros, NXP and Texas Instruments becoming more important in the GPS field. Among those facing an uncertain future are GPS-only chipset makers such as SiRF.