Historically, aftermarket automotive electronics solutions have been very competitive with OEM offerings because of their ability to lead on innovation and value. But with many new, lower-cost consumer electronics offerings entering the market, such as GPS-enabled PDAs and GPS-enabled handsets with Internet connectivity, aftermarket navigation vendors may no longer count on competitive offerings on price alone, according to new research from ABI Research.

"For the occasional user, there is little reason to buy an aftermarket in-vehicle navigation system at this time," argues ABI Research analyst Dan Benjamin. "Soon many users will be able to access navigation services on their wireless phones on a pay-per-route basis. They could also use their PDAs with an add-on GPS kit for significantly less than a navigation system with similar functionality, and still have a PDA to use for other functions."

The research adds that it's not all bad news for the aftermarket vendors. There is still a tremendous niche in the market for premium offerings including those with better implementation than handsets and PDAs, and additional functionality such as dead-reckoning. Vendors best positioned in this market will be those able to offer the most refined products with demonstrable benefits, including must-have features like integrated real-time traffic data and entertainment functions such as satellite radio and DVD-video.

In the long term, the automotive aftermarket may wish to consider allowing for a consumer's wireless device to be incorporated into future hardware design. Designing for a portable device's many embedded capabilities, including Internet access, may enable new hardware offerings that could be crafted with the lower cost of a handset solution and the integration of an in-vehicle solution. This would further expand the scope of the aftermarket niche.

ABI Research covers the market for a host of in-vehicle features such as telematics, navigation, entertainment, and satellite radio in its new "Aftermarket Telematics and In-Vehicle Entertainment Quarterly Service." Competitive offerings and market offerings and trends are broken down and analyzed, including the effects of new competition from consumer electronics outlets. The more conventional dichotomy between OEMs and the aftermarket is also explored, with forecast projections through 2009.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, quarterly intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. Their market research products can be found on the web at www.abiresearch.com or by calling 516.624.3113.