The declining unit price of navigation systems is driving demand in the OE and aftermarket segments in North America, according to Frost & Sullivan research analyst Rahul Ganju.

“Price reductions are being brought about by high rates of product innovation and greater economies of scale,” Ganju said. “With falling prices, automakers are offering systems more widely; this is expected to drive significant growth in the OE hardware side of the market. With the increase in production volumes, per-unit prices are set to decrease further, thus making navigation systems affordable for mid-market vehicle buyers as well.”

Frost estimates the North American automotive navigation systems market to be worth $1.98 million in 2006, climbing to $4.64 billion in 2013.

The firm foresees high growth for the portable navigation device (PND) aftermarket until 2010, after which it will morph as a result of the increasing availability of navigation on innovative and lower-priced substitute products such as cell phones, smart phones and PDAs.