LONDON, July 22 --

The nascent Russian navigation and telematics market is witnessing a reversal
of trends, with global positioning system (GPS)-enabled smartphone technology
gaining ground over traditional portable navigation devices (PND). In 2009, the
smartphone-based navigation market already exceeded 350,000 units sold in
Russia, while the PND market failed to register even half that amount.

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New analysis from Frost Sullivan (http://www.automotive.frost.com), Russian
Consumers’ Desirability and Willingness to Pay for Connected Navigation,
Location-Based Services and Features, finds that the Russian navigation market
saw unit sales of 0.45 million in 2008, and will likely reach 2.0 million in
2012. This shift is attributable to exponential growth in the GPS-enabled,
smartphone-based navigation market and to steady growth in the PND market.

Frost Sullivan estimates that 35 per cent of Russian consumers are interested
in a smartphone-based navigation device while nearly 63 per cent are willing to
pay more than euro 4 per month for a vehicle tracking service based on a
GPS-enabled smartphone. This indicates that firms must define a clear strategy;
positioning products, services and business models around the ever-converging
GPS-enabled mobile handsets market in order to expand telematics and navigation
into the Russian market.

Handset vendors like HTC, Nokia, and Apple are propelling the navigation market
in a new direction by pushing more GPS-enabled smartphones into the Russian
market, notes Frost Sullivan Programme Manager Praveen Chandrasekar. In 2008
the balance shifted more towards the handsets-enabled navigation market rather
than PNDs. This trend, together with results from Frost Sullivan’s
end-user research, clearly shows that this market needs to be addressed with a
smartphone based portfolio in order to succeed.

Eight out of ten current owners of navigation systems in Russia want to
purchase another navigation system within six months. Of these, 49 per cent
still prefer a PND, but a growing 30 per cent favour a smartphone-based
navigation system. Russian consumers are willing to pay upwards of euro 100 for
a smartphone-based navigation solution. In light of the current recession, this
solution could clearly prove to be the low-cost killer alternative.

The economic crisis has put a damper in consumer spending habits in Russia.
Although Russian consumers indicate that they are willing to pay upwards of euro
300 for a navigation device, they might not necessarily be ready to do so in
this economic climate.

The recession comes at the wrong time; the navigation market, driven by GPS-
enabled smartphones and PND, was on an upswing, explains Chandrasekar. However,
consumers are increasingly cautious and this might slowdown market development.

Navigation device and service providers, telecom operators, handset vendors,
telematics service providers and automakers must consider building a low-cost
portfolio of navigation and telematics services for the GPS-enabled smartphone
segment. Russian consumers indicate that they are willing to pay more than euro
100 for such a device and more than euro 4 per month for services like vehicle
tracking. Clearly, this needs to be the primary offer from the original
equipment manufacturer (OEM) and the aftermarket community in Russia.

Automakers and vendors in the telematics, navigation and telecom community need
to address the Russian market with a GPS enabled smartphone portfolio, advises
Chandrasekar. This must be backed up by a solid business model which offers a
variety of pay models and subscription plans.

If you are interested in a virtual brochure, which provides a brief synopsis of
the research and a table of contents, please e-mail Monika Kwiecinska, Corporate
Communications, at monika.kwiecinska@frost.com, with your full name, company
name, title, telephone number, company e-mail address, company website, city,
state and country. Upon receipt of the above information, a brief brochure will
be sent to you by e-mail.

Russian Consumers’ Desirability and Willingness to Pay for Connected
Navigation, Location-Based Services and Features is part of the Automotive
Transportation Growth Partnership Services programme, which also includes
research in the following markets: European Aftermarket for Vehicle Access and
Security Systems, Strategic Analysis of European Market for eCall and bCall
Systems, Strategic Analysis of European Market for Stolen Vehicle Tracking
Systems, An Update of European Market for Telematics Based Pay As You Drive
Insurance Systems and, Executive Update of European Passenger Vehicle Telematics
and Infotainment Markets. All research included in subscriptions provide
detailed market opportunities and industry trends that have been evaluated
following extensive interviews with market participants.

Frost Sullivan, the Growth Partnership Company, enables clients to accelerate
growth and achieve best in class positions in growth, innovation and leadership.
The company’s Growth Partnership Service provides the CEO and the
CEO’s Growth Team with disciplined research and best practice models to
drive the generation, evaluation and implementation of powerful growth
strategies. Frost Sullivan leverages over 45 years of experience in partnering
with Global 1000 companies, emerging businesses and the investment community
from more than 35 offices on six continents. To join our Growth Partnership,
please visit http://www.frost.com.

Russian Consumers’ Desirability and Willingness to Pay for Connected
Navigation, Location-Based Services and Features M409 Contact: Monika Kwiecinska
Corporate Communications - Europe P: +48-22-390-4127 F: +48-22-390-4160 E:
monika.kwiecinska@frost.com http://www.frost.com

SOURCE: Frost SOURCE: Sullivan

Monika Kwiecinska of Frost Sullivan, Corporate Communications - Europe,
+48-22-390-4127, fax, +48-22-390-4160, monika.kwiecinska@frost.com; Logo:
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