China: Within China’s CNY 50 billion civil navigation equipment market, the Beidou satellite system represents a market share of less than one per cent, according to a report published in Caixin online.
The Beidou navigation system was developed by the Chinese government in an attempt to create a domestic satellite navigation system that would eventually have global coverage. When Beidou became operational in 2003, China became the third country, after the US and Russia, to develop a satellite navigation system.
Navigation systems such as the GPS are currently being widely used across the world for a variety of applications including vehicle tracking and car navigation. But while Beidou’s claim becomes even more telescopic against China’s relatively small share of the world’s satellite navigation market, the system’s mission to cover China and the world has always been within a few keystrokes.
However, its limited use comes from the delayed release of decoding files to access the Beidou system, resulting in only a few Chinese application makers producing consumer products that are compatible with Beidou’s systems. Beidou also operates a system different from the GPS or GLONASS, thus resulting in limited system capacity and high-cost terminals.
As Chinese companies hope to postpone the release of decoding files for the Beidou navigation system, foreign companies are losing patience and focusing their investments in Russia’s GLONASS and Europe’s Galileo systems. With such fierce competition in the civil navigation market, does Beidou still have a chance?
Building a User Base
The makers of the system plan to cover the entire Asia-Pacific region by 2012, and by 2020, more than 30 satellites will provide coverage to the entire world. Vice president of BDStar Navigation, Duan Zhaoyu, told Caixin that there are currently more than 20,000 civilian users of the Beidou navigation system, 60 per cent of which use products from BDStar Navigation. More than 10,000 of these users are fishermen in the South China Sea. He also said that the revenues at BDStar Navigation reached more than CNY 10 million in revenues in 2007, and in 2009, it hit CNY 100 million. Despite this explosive growth, the company still lags far behind the global leaders in the navigation market, who bring in more than USD 1 billion per year.
At the end of August 2009, there were only a total of 60,000 Beidou users. The number of registered terminal users was only one per cent of the system’s capacity, leaving the satellite resource seriously underused.
Delay in decoding
At a navigation industry forum held in Shanghai, domestic companies expressed hope that China would continue to delay the release of Beidou’s decoding files in order to give them more time for preparation. Zhang Gengsheng, an engineer at QUALCOMM, the American wireless communications provider, said that if China does not release decoding files for Beidou, it will be very difficult to promote the system internationally. Beidou’s market will be limited to government purchasing because it would be very difficult to move it into the commercial market.
These decoding files are known as the ICD, or interface control document. Terminal developers need this document in order to design the chips. Without it, the satellite signal would be indecipherable. Currently, domestic companies can acquire the ICD by signing a confidentiality agreement. Then they can start developing Beidou application products.
Source: Caixin online