BEIJING, Sept. 13 /Xinhua-PRNewswire/ -- CCID Consulting, China’s leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), releases its article on China’s GPS operations.
In recent years, one of the most dynamic semiconductor application fields is automotive electronics. Among the automotive electronics applications in China, GPS navigation products are growing the fastest, which in turn has led to the fast-growing new market of GPS operations. Statistics show that there are now over 1,000 GPS operators in China with over 1 million vehicles currently in the network. The number of vehicles joining the network is continuing to grow quickly, bringing high profits to operators. However, with the further expansion of the market, the deficiencies in China’s GPS operation industry are gradually being exposed, which is hampering the healthy development of the market. This article will analyze the current status of China’s GPS operations market and explore the development direction for GPS operations in the country.
Where they are now?
Relative to foreign GPS operation systems, GPS operation services are still in an introductory period in China. The division of work between various links of the industry chain is fairly ambiguous, while the market pattern is rather chaotic. Currently, GPS operators in China mainly include GPS terminal makers which integrate the development, production, sales and operations of terminal products and system software into one body; software developers, who mainly develop system software, also engage in operations, while third parties operate independently. As entities with different backgrounds swarm into the market, overlapping investment and resources cause inevitable waste. This is not good in forming or upgrading a comprehensive and healthy industry chain. In addition, the entry threshold for GPS operations is rather low. With one operation platform, capital input of 300,000-500,000 Yuan, and several workers, enterprises can engage in GPS operations. For the time being, operators compete viciously and seek to rapidly take up market share to compete for customers. Some operators adopt unfair competition practices such as make false commitments to users, adjust services fee rates at will, and viciously squeeze competitors. These seriously harm the standardization of market order and the formation of a benign market atmosphere.
Currently, China’s GPS operation market is still at an opening stage. Operators have yet to gain a mature understanding about automobile and personal services. The result is that the automobile and personal services provided are of unsatisfactory quality. However, what cannot be ignored is that inadequate work on GPS hardware and software is also an important reason for the staggering quality of GPS operation service in China. GPS navigation services with high precision and high stability require high quality GPS terminals. But, GPS terminals in China remain at an assembly stage. Manufacturers rarely produce their own technologies. Consequently, they are not able to control product quality or able to introduce new functions. They can hardly screen out potential product problems or solve problems that emerge. Hardware performance is not high, map software cannot be upgraded, and pirated software is of low precision. Serious software and hardware defects seriously affect the precision of dynamic navigation services, while safety and protection services will face even more serious losses. In addition, inadequate survey and research of the target market and older GPS terminal software and hardware technologies mean that GPS operators can only provide rather basic services. Currently, domestic GPS operators mainly offer assisted navigation and automobile safety protection. Dynamic navigation features currently only exist at the stage of planning a route from Point A-to-Point. Much-demanded driving guides, vacant parking slot indication services based on dynamic road conditions, vehicle speed and route restriction information have yet to be introduced. Poor service quality and basic service content have caused a passive situation for operators in which users already join in the network are leaving, while new users can hardly be attracted to join.
Presently, it is not difficult to find problems mentioned above, related to the lack of industrial standard and supervision for GPS operations in China. Currently, China has yet to have relevant legal articles or industry guidelines to respectively constrain and protect GPS operators and users. Some operators have precisely taken advantage of this policy loophole to cheat users and disorder market, making it difficult to safeguard users’ rightful rights and interests.
Where the road lies?
GPS operations have just started in China. Everything is still a bit chaotic. But, such operations have unique advantages. Building upon advantages and improving deficiencies will be the best breakthrough point for GPS operators in China to search for a way out.
GPS operators need to establish close contact with the transportation administration department and the government decision-making department in China to get core resources such as transport information and policy support from these departments. This is the advantage of local operators. It is also the access barrier, which foreign enterprises can hardly avoid. Local enterprises should therefore actively establish benign interaction with the concerned departments to ensure smooth data and information sources. In addition, local enterprises are more knowledgeable of Chinese customers’ needs, habits and preferences. Local enterprises can provide more pertinent services. These factors provide local operators with a relatively relaxed competitive environment. Local enterprises should strengthen and make better use of these advantages to improve their operational quality, make breakthroughs and build a strong national brand.
As for the exploration of service models and the improvement of service quality, operators in China can use international operators’ successful experiences as reference and carry out localized reconstruction. Successful international operators such as Onstar and Wingcast all use automakers as the leading force to guide the development of the pre-installed auto navigation market. This automobile system maker-led navigation operation model is more helpful for operators to achieve comprehensive monitoring and control of terminal product quality and service quality. Comparatively speaking, for the Chinese market where most navigation products are later installed, the one-stop product manufacturing-system software development-operation service model led by terminal makers is helpful for operators to actively supervise and improve the quality of navigation software and hardware and other links of the industry chain, thus easier to increase market-share. This has also been verified by such practices in the market in China at present. The market should therefore greatly encourage the development of this model.
Geographically, GPS terminal production and software R&D in China are mainly concentrated in the Pearl River Delta Region where the economy is thriving and the electronic product industry is growing fast. A large number of GPS operators take root there. As operators in the region are gradually gaining strength, the natural concentration of businesses will be good for establishing an operations network, with Pearl River Delta as the core and branching out around the whole country. It is helpful for the smooth exchange of industry information and the integration of the industry chain. Of course, taking operation enterprises as the leading force and speeding up the introduction of relevant policies and supervisory measures is bound to play a role in pushing forward the standardization and prosperity of the GPS operation industry.
The happy terminus:
The right road will lead us to the next stop: The GPS operation industry, which survives fierce market competition, will get fat business profits. More importantly, its contribution to society -- improved dynamic navigation will help the improvement of the intelligent transport system, thus eventually easing urban traffic congestions in China. Of course, contributing to smooth urban transport in 2008 will also be a precious present which the GPS operations industry will give to the Beijing Olympic Games.
The expansion of any new field will inevitably meet with expected or unexpected difficulties. China’s GPS operation industry is no exception. But, market standardization and prosperity hinges upon continuous strategy adjustment, accumulation of experiences, and even failures. The process is painful, but the result is happy. The beautiful scenery at the terminus can hardly keep people from stopping. Careful positioning and understanding the direction of development will carry GPS operations in China forward in full gear.
About CCID Consulting
CCID Consulting Co., Ltd. (also known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: HK08235), is a direct affiliate of the China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen and Harbin, with over 300 professional consultants and industry experts. The Company’s business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.
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Cynthia Liu
Coordinating Manager
CCID Consulting Co., Ltd.
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Email: liuyan@ccidconsulting.com
