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Philips loses interest in navigation

Steers clear of crowded market

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Philips has gone into reverse on plans to enter the market for personal navigation devices because of fears the sector is getting too crowded.

Consumer electronics division chief executive Rudy Provoost confirmed the U-turn to analysts today.

Philips demonstrated its navigation products at the IFA fair in Berlin a couple of months ago, aiming for a launch in early 2007.

Philips was planning to develop its own navigation devices on a "smart cradle". The moment the navigation device would be placed on this docking station - mounted on the car windscreen - the main functions would be accessed through the docking station controls. The docking station would also incorporate a built-in amplifier and loudspeaker.

The Philips PNS range, announced in June, consisted of three models. Some would have included a built-in Traffic Message Channel (TMC) receiver to automatically warn of roadworks or traffic jams and suggest alternative routes.

However, under concerns that increasing competition would result in low profitability, Philips today confirmed that none of these products would be released.

Shares in navigation market leader TomTom rose on the Amsterdam blue-chip AEX index as a result of the news.

TomTom also faces increasing competition from companies such as Nokia and Samsung. The navigation market has grown from a niche market to an estimated six million to nine million units this year in Europe alone.®

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