VARs Carve Out a Niche in Growing GPS Market

Channel partners find success packaging the devices with other mobile hardware. Distributor Tech Data sees sales opportunities in the technology.

At first glance, selling global positioning system (GPS) technology doesn’t look much like a VAR play. GPS devices are widely available, inexpensive, and simple to understand and use.

So why are channel partners embracing these gadgets? VARs with some skin in the game say they can make a few bucks by selling a GPS either as a standalone units or as an add-on integrated with other mobile devices such as laptops and phones.

“GPSes are a great add-on sales for us as we specialize in selling portable equipment in multiple states,” said Steve Ale, COO, Richards Computer, a Fairfax, Va.-based channel partner. “We can make a little good money from selling GPSes that are part of a multi-state sale,” said Ale.  “As long as we price the units within about $10 of the mass retailers, customers will buy them.”

Ale stressed that GPS units are provided primarily as a service to customers. Even so, sales are up about 25 percent over a year ago, thanks to falling prices and greater user knowledge about integrating the devices into other mobile devices. Ale said most of his customers buy GPSes to link them to a phone or notebook.

"Selling a GPS solution can open up new opportunities in different marketplaces, said Debra Candido, vice president of Manhattan Information Systems. Recently, this New York City-based VAR sold 200 TomTom GPSes to a United Nations. agency that responds to medical and disastrous emergencies in remote areas. The VAR created a GPS solution wrapped around the TomTom featuring enhanced accessories, software applications and installed services

“The GPS device has proved to be an excellent solution for field workers who could not depend on Internet access to help them get to different sites,” she said.

VARs are not the only channel players that see opportunities in the humble GPS. Tech Data (Nasdaq: TECD) distributes a broad array of TomToms and TomTom accessories, including travel cases, USB chargers, protective covers, iPod adapters, mounts, and external antenna or wireless Bluetooth receiver for enhanced GPS reception.

In addition to TomToms, Tech Data distributes the complete line of Harman/Becker personal navigation devices, automotive navigation products from ASUS, and personal handheld navigation devices from Pharos.

However, VARs and distributors should heed the writing on the wall – integrating GPS devices with other mobile devices may be a spent market.

The GPS chipset market will be driven by integration into mobile devices, including personal navigation devices (PNDs), cellular handsets, mobile PCs, and a variety of portable consumer electronics (CE) devices, reported researcher In-Stat last year. In-Stat forecasts that sales of mobile devices with integrated GPS may grow from 180 million units in 2007 to 720 million units in 2011.

TAGS: consumer,wireless,GPS,Tech Data,VARs



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