NPD Group Blog » PNDs will navigate the holiday’s bumpy road

PNDs will navigate the holiday’s bumpy road

Wednesday, December 3rd, 2008
By Ross Rubin, Executive Director, NPD Connected Intelligence

Flat-panel TVs and PCs may be the workhorse revenue drivers during the holiday season, but the same big price tags that help them achieve that standing also make them somewhat less popular as gifts. In contrast, portable electronics such as MP3 players and digital cameras have consistently been among the most popular holiday categories for the past few years because of their relatively small price tag and dimensions. They’re cheap to ship directly from an online retailer or to a distant relative or friend. They’re also products that consumers can take great advantage of in their daily lives, which further helps their gift appeal.

In that vein, there’s been doubt cast about how well Portable Navigation Devices (PNDs) will do this holiday season. Despite several attempts to turn them into everyday resources in the vehicle, they are still primarily used opportunistically or what I call the LOFT (Lost or First-Trip) scenario. At the high- end, Dash Navigation, which made a bold attempt to move the industry past LOFT, recently got out of the hardware business. It has, however, been quickly succeeded by Telenav with its slimmer and less esoteric Shotgun.

The Shotgun still requires a subscription, though, and a key aspect of PND marketing has been the lack of subscription fees. Prices also continue to fall and with penetration below 20 percent as of this past summer, there’s still plenty of headroom left in the category. While they are not quite the personal products that MP3 players and digital cameras are, what PNDs lack in the emotional appeal, they somewhat make up for in a message of safety, security, and in some cases, safety and security. Units will still continue to see healthy growth. Year-over-year revenue, however, will be a different story as the sell-through of sub-$100 product will cause declines beyond what we saw through the fall. Most GPS-enabled cell phones are no imminent threat yet, although getting TomTom’s software or Telenav’s service up on a large-screen device like the iPhone could change that game faster than a round of Tap Tap Revenge.

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