Digital devices in cars are a hot area lately, led by navigational systems and audio/video, and the same small group of chip suppliers tends to benefit. There are signs, though, that revenues might shift as GPS becomes a more important part of the in-car experience.
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Data from iSuppli shows the top-five automotive “info-tainment” chip suppliers, STMicroelectronics (STM), NXP Semiconductors, Renesas, Sanyo (SANYY.PK) and SiRF (SIRF), captured nearly half of the chip revenue in the sector, or 48.9 percent, during 2006. The top two suppliers combined for nearly 30 percent share.
The numbers do not seem to include devices like Apple’s (AAPL) iPod, which is now compatible with many of the new cars on the market but is not often classified as an automotive infotainment item.
Digital in-car experiences continues to be a focus for the likes of automaker Ford (F) and electronics giant Sony (SNE), who agreed in April to offer Sony-branded audio systems across the lineup of Ford and Mercury branded vehicles in North America beginning in 2008.
This year and next, though, iSuppli predicts navigational systems will be the hot growth area.
“The year 2006 was another bumper period for Portable Navigation Devices, and this market is set to grow by 78 percent in 2007 compared to 2006, with the main European and U.S. regions displaying an increased appetite for all things GPS,” said Richard Robinson, principal analyst for automotive electronics at iSuppli. “iSuppli’s latest navigation shipment forecast projects that the market will triple to more than 65 million units between 2006 and 2012, with the competition for both GPS silicon and Internet Protocol solutions heating up.”
New revenues won’t necessarily go to the same old suppliers, however; iSuppli pointed out that navigation leaders TomTom (TMOAF.PK) and Garmin (GRMN) are already hedging their bets to make sure no one supplier gets too powerful. Case in point: Last year TomTom shifted some purchasing from SiRF to Global Locate, an up-and-coming in-car player owned by Broadcom (BRCM).
Below, the market share numbers:
