GPS Future Lies in Navigation Markets

he Pentagon's $12 billion Global Positioning System of navigation satellites is helping boaters stay on course, planes come in for landings and ambulances find people who call for help. It's also created a $1 billion industry that experts predict will be worth $6 billion by 2000.

Since 1982, Charles Trimble's company has provided receivers for commercial and military users of the positioning satellites. Considered the market leader, Trimble earned $175 million in 1994. Within the next two decades, Trimble predicts GPS will be built into most electronics.

WT: Which of the GPS markets are booming now?

Trimble: The market that we've defined as surveying and mapping is clearly blooming. That market is growing at a little better than 50 percent a year. In terms of unit volume, the car navigation market is doing very well, with volumes up 90 to 100 percent in the last twelve months.

WT: What about smaller markets?

Trimble: There are markets in navigation -- avionics and marine. Those are fine, there's price erosion in the marine market. The aviation market has a lot of long-term promise [because] of the change in the way national and international aerospace will be managed. That will be a relatively slow, methodical sort of expansion.

Hand-held [GPS receivers] are doing well as prices drop.

WT: How are the hand-held GPS units being used?

Trimble: The big markets for [these] units are the low end of the marine and aviation markets. There's splinter use in search and rescue, and there's an emerging outdoorsman, hunter/hiker market.

The mobile computing market is basically in its infancy. They are coupling GPS with communications, with portable computing devices such as laptops or PDAs [personal digital assistants]. And the interrelationship between the cellular and GPS is emerging.

WT: Where do you see GPS going and which markets potentially offer the most business?

Trimble: First of all, GPS isn't a product. It isn't an electronic technology. It's basically an information technology. So at the lowest level, the hardware of a GPS receiver is nothing more than something like a power supply. It's something like the modem to the communications network. In that sense, GPS is going to be everywhere in the mobile environment and it's going to be totally integrated for the end user.

In terms of where you are likely to find these things, we separate them into consumer markets and commercial markets. Roughly 25 million consumer devices having GPS inside will probably be sold in the year 2000. To put this size in perspective, the PC business this past year generated about $45 million.

The three principal consumer applications [for GPS] will tie in with car navigation, use in conjunction with mobile computing and in conjunction with all of the variety of cellular phones.

As we get into commercial markets, we are selling efficiency and productivity. Sometimes you will be able to detect that GPS is there and sometimes it will be part of the integrated process. Vehicle tracking, GIS [geographic information systems], data capture and use, land survey and commercial navigation will be a big deal.

WT: What stage of development is the GPS industry in and when do you expect it to be at its full potential?

Trimble: It's clearly emerging, yet last year if the entire industry were a single company it would have just made its way on the bottom of the Fortune 500 list. So it's impossible to think of it as something other than emerging. As information technology becomes totally ubiquitous, GPS becomes totally integrated. GPS as an industry will be very noticeable and have large numbers in a decade, but in two decades it will be pretty hard to tell where GPS stops and communication and computation begin, because from a hardware standpoint, all of that will be integrated.

WT: Is there a foreign market for GPS?

Trimble: Absolutely. More than half of our business is outside the United States. Currently there are about 60,000 GPS receivers per month being purchased, half of those are bought in Japan for the car navigation market. The system is worldwide, [although there's a greater] need to use it in the infrastructure of developing countries because they don't have a land-based infrastructure.

WT: The Pentagon paid the $12 billion to put up the system of satellites, what should the government's role be now?

Trimble: I prefer to think that U.S. taxpayer money put the technology in place. We have asked the U.S. military to effectively manage that system and frankly, they are doing a pretty good job. The technology is one of a handful of dual-use technologies with great civilian and military uses. But it's important to figure out how to maintain each party's equity in the system because there are a lot of benefits for being able to be dual use.