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Experts See GPS Use Gaining Momentum

By | December 15, 2003

      Consumer use of Global Positioning System (GPS) services has grown considerably during the past five years and now is almost “omnipresent” in the daily lives of Americans, said Ron Stearns, principal, senior analyst, Frost & Sullivan, a market research company in Petaluma, Calif.

      A survey conducted by Stearns looked at the GPS marketplace and found that GPS equipment sales are projected to hit $3.46 billion this year. The total is forecasted to reach almost $10 billion by 2010.

      “This is still a relatively young market in terms of its age and size,” Stearns said.

      The study counted revenues from GPS equipment sold to end-users in consumer, commercial and military markets. GPS satellite construction, launch and control segment revenues are not included in the survey, nor are major systems where GPS plays a role, such as flight management.

      Key industry trends, according to Stearns, are:

      • The market is propelled by high-volume applications, such as in-vehicle navigation, fleet management, and to a lesser degree, recreational land-based and marine users;
      • Falling prices for low-end consumer GPS hand-held devices now make some units available for below $100;
      • Shortened product development is bringing new advances to the consumer faster than in the past.

      Consumers will account for 52 percent of total GPS equipment sales during 2003, Stearns projected. Commercial customers will buy 40 percent of the GPS equipment this year, while the military will capture the remaining 8 percent, he concluded.

      Stearns offered his findings at a recent one-day seminar held in Washington called “GPS: Military Systems/Public Utility,” jointly sponsored by U.S. Chamber of Commerce’s Space Executive Council and the Center for Strategic and International Studies. His report assessed equipment sales in six market segments: general aviation, land, marine, military, timing and wireless, as well as 19 sub-segments.

      Matt Jones, Boeing’s [NYSE: BA] manager for GPS programs and government marketing, pointed out that his company has built 30 GPS spacecraft and will manufacture the next-generation 2F GPS spacecraft.

      Jones said he and his Boeing colleagues view the planned launch of the Galileo system by the Europeans as a “welcome addition.” However, the Galileo system should not interfere with GPS, he added.

      “There is almost no way to predict what could be done by users with 40 or 50 positioning satellites, if the systems are harmonized,” Jones said. If such cooperation does not occur, “We should all be embarrassed,” Jones told the group of industry and government representatives in attendance.

      John Sundquist, vice president of Lockheed Martin Navigation Systems Programs, a unit of Lockheed Martin [NYSE: LMT], said a modernized GPS system should improve signal availability and accuracy, protect critical infrastructure and maintain free access for users.

      Galileo would be an “excellent addition” to global navigation services, Sundquist said. He added that the U.S. government should work cooperatively with the Europeans in the rollout of Galileo.

      Stephen Moran, director of civil space programs at Raytheon [NYSE: RTN], told the attendees, “we in the U.S. need to change our thinking process away from providing a GPS system to providing position, navigation and timing (PNT) services.” The Europeans already are looking at Galileo to provide positioning and value-added hybrid services, he added.

      Moran joined the chorus of U.S. industry officials who support the U.S. government’s decision not to levy GPS user fees and to provide open civil GPS signals.

      The lack of user fees is the “largest single contributor” to the rapid growth of GPS applications and markets, Moran said. He warned that Europe could misstep by charging for Galileo services.

      However, he agreed with other industry speakers by saying compatibility with Galileo is a “requirement” for a modernized GPS system, and vice versa.

      “GPS-Galileo compatibility is most critical for commercial users, especially safety-of-life users such as civil aviation, and shows up in the immediate need for a common definition of integrity,” Moran said. “Without a common understanding of the detailed approach to integrity monitoring and provision, future GPS/Galileo receivers will be forced to accommodate the least common denominators of both systems. As a result, total system performance will be much less than optimum.”

      Another priority should be anti-jam/anti-spoof technologies for safety-of-life applications, especially civil aviation, Moran said. The U.S. currently is spending $100 million to assess the feasibility of providing airliners with protection against shoulder-fired missiles, but nothing to assess the need to protect against the more likely threat of GPS jamming, Moran said.

      In the view of Charles Trimble, the founder of Sunnyvale, Calif.-based Trimble Navigation [Nasdaq: TRMB] and chairman of the U.S. GPS Industry Council, the Galileo system will be technically superior and more modern than the U.S.-built GPS.

      “The Europeans have the opportunity to start with a clean sheet of paper,” Trimble said. “They have the option of bundling services with GPS.”

      Indeed, the Europeans plan to charge for the bundled services that accompany GPS. Bundled services currently are not offered by GPS.

      –Paul Dykewicz

      (Ron Stearns, Frost & Sullivan, 707/781-0823; Matt Jones, Boeing, 703/465-3339; John Sundquist, Lockheed Martin, 610/354-1768; Stephen Moran, Raytheon, 703/284-4347)

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