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US : GPS in the GSM mobile phone has always seemed to be a year away. But 2007 may be the year that it finally arrives, and 25% of WCDMA handsets will offer GPS by the end of 2008, according to a new study from ABI Research.

There are four important reasons for this, says principal analyst Alan Varghese. “The first factor inducing vendors to include GPS is regulatory, that is, the mandates for emergency calling in the various regions. The second is competition: the CDMA carriers who have had GPS integrated in their handsets since 2002 have been turning on Location Based Services over the past year. A third is economic: carriers continue to look for ways to increase data ARPU and recoup some of their high licensing costs for 3G spectrum. Finally, there is consumers’ need for portable navigation and other applications driven by location awareness capabilities in the network.”

All these drivers—as well as increased accuracy requirements, and the fact that existing network-based positioning technologies do not work as well for upcoming 3G and WCDMA cellular standards—are pushing GPS ICs into the handset.

ABI Research sees 2007 as the year the GSM carriers will issue RFQs, and vendor selection and IC integration for the handset OEMs will take place; but by the end of 2008 a quarter of all 3G handsets will have GPS ICs included, and the ASP of the chipset will have dropped to $2.70.

“SiRF has been the leader in the GPS IC space for the last several years,” notes Varghese, “but in the mobile phone segment, Atmel/u-blox, Global Locate, GloNav, Nemerix, Texas Instruments, and u-Nav will soon be nipping at their heels.”

ABI Research’s new study, “GPS Semiconductors” discusses these issues in detail, examining market drivers for mobile phone GPS, geographic variations, handset penetration rates, associated chipset ASPs and revenues, LBS deployment schedules worldwide, and the implications of Galileo and other satellite constellations.

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This Weeks 3G News