Philips Exits PND Market Before Entry

Philips Electronics, the Netherlands-based electronics giant that is Europe’s largest consumer electronics company, said in June 2006 that it would enter the personal navigation device (PND) market in the fall, to compete with Garmin, TomTom, Magellan, and other PND makers. But it abruptly pulled the plug on that effort in early December, stating that it was no longer interested. A spokesperson confided that the company had watched the market closely and decided it was too crowded.

This marks the second time Philips has retreated in this sector. Although its Carin system was an early dedicated in-vehicle nav system (circa 1990), and the company was an early investor in NavTeq, it later abandoned that market.

The booming European PND market, which analysts say could double to about 5 million units, has attracted Japanese consumer-electronics giants as well as many smaller Taiwanese manufacturers. Hardly a day goes by without a trumpeting of a new PND, often from a company heretofore unheard of in GPS and nav circles.

“It’s a very competitive market and it puts a lot of pressure on profit margins,” stated the Philips spokeperson. “We decided we need some focus, and navigation devices like these don’t fit within this focus.”

The company remains interested in GPS in general, but not for stand-alone products. “We don’t want to go further with GPS as a single device, but it’s an interesting technology to implement in other products,” she added. Mobile phones or digital music players remain as possible candidates for GPS capabilities.