GPS Units Headed For Commodity Future

London, England (AHN) - GPS units, one of the hottest sellers for Christmas 2007, may be headed the way of the calculator as costs come crashing down, along with the profits of manufacturers. Wednesday, European GPS provider TomTom reported a 83 percent drop in first-quarter profits.

In 2007, 33.9 million standalone GPS devices were sold, almost triple the number sold the previous year. With increased demand came plummeting prices, with stand-alone GPS units selling for less than $200.

TomTom, one of three top makers of GPS devices, announced this week net profits of $12 million for the first quarter, down drastically from $70.3 million earned during the same period in 2007.

Garmin, a U.S. GPS manufacturer based in the Cayman Islands, is set to report its quarterly numbers April 30.

Along with the rising popularity of GPS, the technology is increasingly being integrated into cell phones and autos. According to the AP, 20 percent of European drivers and 10 percent of U.S. motorists now use in-dash location devices.

Research firm Gartner said by 2010 there will be a roughly five times increase in the number of cell phones equipped with GPS features. In two years, 500 million mobile phones will have GPS, compared to 95 million stand-alone units.