Location Based Services will power GPS in the handset, says ABI Research

Location Based Services (LBS) will unlock the market for GPS in the cellular handset, according to a new study from ABI Research. The initial impetus for determining the position of the cellphone user within certain accuracy and reliability constraints came in the form of the U.S. government's Enhanced 911 mandate.

Implementation, however, has followed differing scenarios in the CDMA and GSM camps, which are analyzed in the new publication, GPS IC Markets: RF and Baseband Semiconductors for A-GPS and GPS Equipment Solutions. Qualcomm, manufacturer of the majority of CDMA chips, incorporated GPS in CDMA chipsets at an early stage. But GSM operators initially pursued non-GPS solutions such as Cell-ID, Enhanced Observed Time Difference, and Time Difference of Arrival; these required no hardware changes in the cellular handset, and avoided increased costs. This translated to a difficult time for makers of GPS handset chip sets.

These non-GPS approaches however, have some deficiencies, including the need to see multiple base stations, which is a problem in rural areas; moreover, multi-path effects can affect their accuracy. This points to the most important factor for GPS chips in the coming period: the increasing interest in Location Based Services (LBS), most of which require the greater accuracy provided by GPS. LBS are expected to gain significant traction in the U.S. market in 2005, as they have already done in the Far East.

Cost will be a critical factor in the adoption of GPS in this sector. The study's author, Alan Varghese, says that the RF-Baseband chip combination for GPS in the handset currently has an average selling price of $7 to $8. "Handsets are very cost-sensitive devices," he points out, "so the issue for widespread adoption is that the average selling price needs to come down to something below $5. Manufacturers' strategies to do this will center initially on migrating to smaller process geometries, and to System-in-Package and System-on-Chip type solutions; subsequently, they will integrate the baseband functions of GPS into the baseband of the handset itself."

The ABI Research study, GPS IC Markets: RF and Baseband Semiconductors for A-GPS and GPS Equipment Solutions, examines the current state of the market, operators' strategies for deploying LBS, the need for the more accurate position location offered by GPS compared to network-based solutions, and the implications of adding GPS functionality to the handset in terms of GPS IC architectures, costs, and performance. This report also looks at noncellular applications of GPS ICs such as in automobiles, marine navigation, military equipment, aviation, asset tracking, and land surveying. Lastly, it includes ABI Research's near-term and 5-year technology and market predictions for GPS ICs.

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