A downward spiral has been forecast in personal navigation devices with the market set to halve while mobile navigation and telematics looks forward to a bright future.

A study by ABI Research says PNDs face a grim future resulting from over-inflated shipments which have created a false impression of market strength, and a slowdown in innovation.

However mobile navigation and telematics is going from strength to strength, with ABI forecasting more than 500 million downloads in 2016.

Senior Analyst Patick Connolly has called for a removal of cost barriers to customers, and to open up the OS to encourage app developers.

He said PND OEMs face tough decisions on whether to milk the PND cash cow for as long as possible or try and create a sustainable market, with secondary revenue sources such as data analytics, applications, traffic and advertising.

Many PND manufacurers have consolidated or exited the market, while others are developing new products in growing markets. These include in-car, recreational and fitness, tablets and mobile applications.

Connolly observes: “The connected PND market is forecast to represent almost 40% of all shipments by 2016. Yet, there is not enough time to allow this market to evolve organically, while ‘nickel and diming’ customers with high subscription fees.

“The existing business model must be overhauled, removing cost barriers for customers, boosting hardware platforms and opening up the OS to encourage application developers. Such measures might just accelerate uptake enough to save the overall market.”

Senior practice director Dominique Bonte adds:”Adopting this new approach will not only help to sustain the market, but will also open … areas that remain under the radar but are set to generate an increasingly large proportion of overall revenue.”