ProDDAGE study (June 2006)

Executive summary

The overall size of the GNSS market is forecast to reach 3.1 billion receivers in 2025.

The main markets for satellite navigation receivers are the mobile phones (1.9 billion receivers) and road transport (1.1 billion) markets. The mobile phone market is growing more slowly than expected from a study completed two years ago, while the telematics car market is exceeding expectations.

The market drivers for GNSS uptake in these two principal markets are a combination of commercial and policy drivers. For mobile phones, uptake was driven by the E911 regulation in the US while the uptake in the Pacific Rim countries was driven by commercial location-based services (LBS).

In contrast, Europe is likely to be a leader in the road market with its eCall policy and road user charging (RUC) standardisation initiatives where GNSS technology offers significant advantages. The uptake worldwide of satellite navigation systems installed in cars is driven by equipment evolution (from build-in to portable to stand-alone systems) and improved usability due to improvements in digital maps.

The majority of the GNSS revenue arises in North America, Europe and the Pacific Rim with the 2025 forecast revenues of €462bn divided 24%, 26% and 21% respectively. Central Asia is the next largest revenue producer with a 10% share.

The uptake of GNSS services in the safety critical transport applications (aviation, rail and maritime) is slower and less definite due to the more conservative nature of the regulatory authorities involved at both the international and national levels. However, the aviation community is leading the way with the deployment and trialling of satellite based augmentation systems (SBAS) for GPS such as EGNOS and WAAS. For these markets the integrity functions (with a predefined time to alarm for malfunctions) of EGNOS and WAAS and the Galileo Safety-of-Life (SoL) service is key.

Professional markets are characterised by their requirement for high performance, cost effective GNSS solutions. In some cases, EGNOS services will be used since they offer improved accuracy at low cost. However, the majority of applications need the centimetre or better accuracy currently met by differential GNSS systems. However, the use of Galileo together with GPS will offer these markets a more robust and reliable service and with a short equipment replacement cycle (about five years). Galileo uptake is expected to be fairly rapid.

The number of receivers for the SoL and GNSS professional markets is predicted to total over 30 million in 2025. Although significantly smaller than the mobile phone and road markets, these applications will bring significant user and social benefits, and in some application areas will offer excellent business opportunities for local service providers (not covered in this study).

A Galileo Commercial Service with an accuracy of 0.5m could attract up to 800 000 users by 2025.

Context and approach

This report presents the results of the most recent Galileo market analysis carried out in the ProDDAGE contract for the Galileo Joint Undertaking (GJU). The objective of this analysis was to update earlier analyses. The work focussed on the priority markets agreed with the GJU and in general priority was given to those markets that:

  • are large in terms of number of users or revenues, e.g. mobile phones, road transport;
  • are changing, e.g. mobile phones, road transport;
  • have not been updated in the last five years, e.g. professional markets; and
  • have strategic importance, especially in the context of their impact on the Galileo concession, e.g. the aviation, rail and road transport markets.

The market analysis described in this report is a global, bottom up analysis based upon individual applications with annual values of size out to 2025 broken down into 10 regions. The data and the approach are the current view of the Galileo and GNSS world-wide market and the results, therefore, replace earlier analyses carried out by the GALA (2001) and Galileo GMO (2003) analyses.

The general market analysis approach first applied in GALA and adopted for GALILEI was used for the ProDDAGE study. The task was distributed by market sector to a number of market specialist companies:

  • Helios was responsible for the aviation and maritime markets;
  • ERTICO was responsible for the road transport market;
  • Bombardier was responsible for the rail market;
  • Alcatel Space was responsible for the personal location-based services (LBS) market i.e. mobile phones)
  • Thales was responsible for the professional group of markets and applications.

In this summary, the overall market forecasts are based on in-depth analysis of a large number of priority applications out to 2025. The global forecasts are broken down by market and application area, as well as by region. These are followed by a brief description of the key markets, including their characteristics and main market drivers.

The Galileo Public Regulated Service (PRS) service was not considered since it is the subject of another study. However, it is likely that new customers and applications outside of those considered in this report will use PRS. Consequently any sales of PRS receivers and any fees obtained for the use of the service will be additional to those forecast in this report.

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Author: Esys Ltd.