The GP-1060 handheld GPS device from CPIT features a 3.5in display, Win CE .net 5.0, dual antennas and TMC. It measures 9.5x86.5x24mm.

Guangdong boasts an extensive supply chain and skilled manpower for GPS manufacturing.

Considered as a pioneering production hub for electronic industries in China, Guangdong province in the southeastern part of the country continues to set the pace for handheld GPS product development and production. The province leverages its several comparative advantages over other production hubs in China for GPS products.

Guangdong has many years of experience in electronic product manufacturing, which has helped established a strong support industry and supply chain from passive components, SMT, molding production and plastic injection to a comprehensive transportation network. Except for some imported components provided by distributors, passive components, LCD modules and Li-ion batteries can be sourced in the region. The region also has a network of professional subcontractors for mold making, plastic injection molding, SMT, testing and VMI services. These subcontracting partners provide makers the flexibility and ease of inventory to enhance production efficiency.

The increasing number of GPS design houses in the province, such as YF International and Sinoembed, is also contributory to the rapid growth in China's handheld GPS industry. The establishment of these design houses has facilitated direct sourcing of modules and design solutions for a number of small makers of GPS products. The province also has a rich pool of technicians and skilled workers that can be easily tapped for the production of GPS products.

The growing GPS industry, however, poses a challenge for many makers to differentiate their products to rise above stiff competition. With makers adopting the same solutions, many of the available products have similar features and functions, which has subsequently resulted in fierce price competition. Within the next six months, interviewed makers forecast a 10 percent drop in prices of handheld GPS products.

Despite the price war, makers of handheld GPS products in Guangdong have an optimistic outlook for the product line for the months ahead. Most makers forecast stable sales in 2008 regardless of dropping export prices. This is driven by strong market demand, especially for portable navigation devices (PNDs), which are expected to grow by at least 20 percent.

As of end-2006, there were more than 200 GPS makers in China, of which 150 can be found in Guangdong, according to CCID. Aside from Jiangsu, Beijing and other areas in the Pearl River Delta, most of the leading GPS makers are located in the province of Guangdong, which include Central Pacific Electronics (Shenzhen) Ltd and Shenzhen Coship Electronics Co. Ltd. It is estimated that about 70 percent of handheld GPS makers in Guangdong are based in Shenzhen and Dongguan.

Most handheld GPS makers in China are small and medium-sized companies that outsource mold tooling and plastic injection molding to local partner factories. Some makers also subcontract SMT. Other companies outsource all manufacturing processes to EMS companies and only undertake R&D and marketing work.

Companies with an average monthly output exceeding 10,000 units generally handle SMT and software design in-house. It is seldom that a company conducts in-house mold tooling.

Link Plus International HK Co. Ltd has a monthly production capacity of about 80,000 units. Its actual monthly output averages at 10,000 units. The company owns an SMT workshop with four surface-mount machines. It also performs plastic injection molding, manual insertion, assembly and packaging in-house. The company designs its own molds and subcontracts the mold making process.

Except for a few companies such as CPIT, most companies do not consider GPS as their core product. These companies are also makers of mobile phones, portable media players (PMPs) and other electronic products. Since these products have various components and materials common with GPS, makers with relatively small capacity take advantage of cutting down cost in sourcing materials.

CPIT is a Hong Kong-invested company based in Shenzhen, Guangdong. The company is engaged in the development, production and sales of portable GPS products.

In 2007, the company generated $70 million revenue from sales of all products. With the surge in demand for GPS products in Europe, CPIT is expecting to generate $150 million from sales of portable GPS products in 2008

CPIT plans to expand its current production capacity of 150,000 units to meet the increasing demand. The company is utilizing 80 percent of its current capacity.

Makers in Guangdong are export-oriented. More than 80 percent of the handheld GPS products from the province are exported, according to China Customs statistics.

The top destinations for handheld GPS from the region are Western Europe and the US. Some makers are also planning to expand their business to Russia and South America this year.

E-Song Digital (Hong Kong) Ltd exports all of its GPS products to North America and EU, each with a 35 percent share of total sales. Almost all of E-Song Digital's orders come from OEM buyers. E-Song Digital forecasts more than 50 percent growth in its export business, particularly in the EU market.

Eighty percent of CPIT's sales are generated from overseas shipments. It exports to Eastern Europe, the US, South Africa, Australia and Brazil. In the next one or two years, the company will be expanding its markets in Eastern Europe and Russia.

All of CPIT's products go to OEM and ODM customers. Its OEM clients include RAC (UK), N-Drive (Portugal), Carrefour (France) and Binatone (UK).

Most handheld GPS products support A/V functions such as MP3 and MP4. Aside from MP3 and MP4 functions, makers in Guangdong are also adding Bluetooth capability to their handheld GPS products. Some companies launched Bluetooth-capable models in 2007.

To differentiate their products, many GPS makers are enhancing the housing designs of handheld GPS devices. Some models come with ergonomic features and some are designed specifically for female users.

Makers are also emphasizing antenna design, anti-interruption and bypass in developing GPS products. R&D engineers also take into consideration EMC and EMI for portable GPS.

Prices are forecast to go down in 2008.