Home to over 60% of the world’s population, Asia is the world’s fastest growing economic region and an increasingly important global navigation satellite systems (GNSS) market. In fact, as the region transforms itself into a knowledge-based economy, several countries are preparing to launch their very own GNSS constellations. At the same time, companies from across the region are inserting themselves at every point of the GNSS value chain, including the manufacturing of chipsets.
According to the most recent edition of the European GNSS Agency’s (GSA) GNSS Market Report, Asia is also the primary region for global market growth in terms of in-use GNSS devices. The region is forecasted to grow 11% per year, from 1.7 billion devices in 2014 to 4.1 billion in 2023 – more than the EU and North America combined.
A stepping stone to Asia
Clearly, Asia is quickly positioning itself as a GNSS hotspot. As such, the GSA is dedicated to ensuring that European businesses are in a position to benefit from it. As part of this effort, the Agency is actively engaged in several Horizon 2020 funded projects geared towards supporting European interest within the Asian GNSS market.
One of these projects, GNSS.asia, is dedicated to developing and implementing GNSS industrial cooperation between European and Asia-Pacific GNSS industries, with a focus on the downstream market. The project maintains a team of GNSS and industry experts in its target countries of India, China, Taiwan, Korea, Japan and South East Asia that lend individual support to European companies. For each of these countries, the project offers specific market analysis, networking and speaking opportunities at Asian events, and overall support to companies interested in doing business in or with Asia. All of its services are free of charge to European companies.
Over the past five years, GNSS.asia has assisted dozens of European small and medium-sized enterprises (SMEs) from across the entire GNSS value chain in finding suppliers, clients, distributers and research partners.
The Asian market presents great opportunities to EU companies:
- China and location-based services (LBS): With an explosive annual growth rate forecasted at 46% up to 2020, the Chinese LBS market is a huge and relatively accessible market for European players. The gaming and marketing segments are the most promising for cooperating with Chinese partners, but companies like TomTom are also seeing success in its joint venture with AutoNavi for mapping applications. More so, a rapidly aging Chinese population is triggering a surge of healthcare apps that rely on GNSS data for personal health management.
- Taiwan: Taiwan has emerged as a world-leading GNSS receiver and chipset manufacturer. Taiwan based Mediatek, for example, is the world’s second largest mobile chipset manufacturer. In 2015, it saw its market share jump from 14% to 19%. As a result, it now threatens the dominance of the current market leader, US-based Qualcomm. Placing a strong focus on R&D, Taiwanese chipset manufacturers will play a significant role in the future evolution of GNSS mobile chipsets.
- Korea and vehicle telematics: Considering that Korea and the EU are amongst the largest car manufacturing regions in the world, there is immense potential for collaboration in the automotive telematics industry. The Korean commercial vehicle telematics market experienced a growth rate of 5% over the last five years, as Hyundai and KIA increasingly turn to GNSS as an integral part of future information technology services (ITS). On top of this, the EU-South Korea Free Trade Agreement eliminated duties for most industrial goods, further enhancing the favourable business environment for European entities.
- India and Smart Cities: Launched in 2015 by the Indian government, the Smart Cities Mission for Urban Development aims to transform 100 Indian cities into sustainable, safe and citizen-friendly environments. With a budget of USD 15 billion, GNSS applications will play a pivotal role in realising this vision, providing solutions for improving energy efficiency, waste management and urban mobility. There is also an opportunity for European companies to leverage their rail know-how following the 2013 authorisation of direct foreign investment in India’s railways.
- Japan and LBS: The GPS-based augmentation system QZSS, set to become operational in 2018, will drive domestic demand in centimetre-class applications for receiver manufacturers, system integrators and application developers. An estimated 80% of the economic effects created by QZSS are forecasted to take place in the car navigation, mobile terminals and value-added mobility application segments. Furthermore, the upcoming 2020 Tokyo Olympics will give precise positioning and timing solutions an added boost.
- South East Asia and natural disaster monitoring and surveying: In a region frequently hit by natural disasters, the governments of Indonesia and the Philippines have made the development of early warning systems for tsunamis, earthquakes and volcanic eruptions a priority. With its nascent GNSS industry, South East Asia is a particularly promising field for foreign providers of GNSS applications. This is especially true in the surveying market, as the density of the tropical rain forest canopies that cover much of the region favour satellite-based surveying techniques.
Without a doubt, the evolving Asian GNSS landscape represents a land of opportunity – even for smaller European players. Despite all of its challenges overcoming any entry barriers is not an insurmountable task.