Technology Acquisitions and the Shrinking GPS Semiconductor Landscape

The announcement this week by u-blox regarding its plan to acquire Geotate, while a bit of a surprise, continues the trend that began in earnest back in 2007, with GPS semiconductor companies disappearing from the competitive landscape after receiving an offer they couldn't refuse. While handsets still have a way to go before maturing as a market opportunity, the competition for handset design wins is ferocious and the playing field is packed with major GPS chipset players, leaving only the bleacher seats for the smaller, less fortified sector companies to watch the action. GPS companies are already looking to digital cameras as the next 'hot' application for positioning technology. Geotate is a leading proponent of the post-processing approach, but their strategy - in its current form - has some limitations and is likely to meet with some resistance from consumers. Post- processing requires more data to be stored at the time the photo is taken, which can have memory implications. Any post-processing approach must have a way of notifying the camera user when location data is not available (e.g., obstructed view of the sky such as in an urban canyon). Otherwise, the user will not know this until later during post-processing - after the opportunity to tag the image has passed. Finally, post-processing means a user cannot share a geo-tagged image with friends via a wireless social network at the time the image is acquired. For u-blox, geo-tagging is an important move into consumer mobile devices. The company has done a fine job of advancing its GPS module product line, adding capability and performance improvements while shrinking the device footprint. A GPS module that can approach the dimensions of competing chipsets might be very popular with smaller digital camera manufacturers who do not possess captive RF engineering expertise. It makes for an interesting scenario, one that I expect will continue to generate press releases as GPS sector companies jockey for position in the evolving consumer device market.