Final Report to

National Academy of Sciences

Committee on the Future of the Global Positioning System

May 1, 1995

BOOZ • ALLEN & HAMILTON

North American GPS Markets

Since our original projections were developed in September 1992, a number of factors have altered the market for GPS and DGPS products and services. These factors, comprising technology, market and policy elements, are having an influence upon the size and veracity of the GPS and DGPS markets.

BOOZ • ALLEN & HAMILTON

BOOZ • ALLEN & HAMILTON

North American GPS Markets

The general forecast assumptions below were used in our econometric models to quantify market size and composition, and general economic activity in the North American GPS industry (and apply equally with SA On and SA to Zero).

BOOZ • ALLEN & HAMILTON

North American GPS Markets

Definitions: Advances in GPS technologies and DGPS techniques have been demonstrated to deliver improved performance. The prospect of SA being turned off in the near future may also be greater. This will improve all accuracy categories.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

Defined applications of DGPS categories continue to grow as the utility of GPS is exploited by industries at all levels of the value chain seeking distinct competitive advantages.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

Cost of GPS technology of OEM or imbedded applications will continue to decline, and performance will dramatically increase in lockstep.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

The GPS Product area will exhibit similar trends, with avionics and surveying equipment retaining the highest sophistication and selling price.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

The marine market will enjoy complete high end penetration from GPS and DGPS, while the recreational market must wait for higher utility, low cost entries spun out of the land vehicle sector.

Marine Segment Penetration (SA On) Cumulative 10 Year Market 1994-2003

BOOZ • ALLEN & HAMILTON

North American GPS Markets

The land vehicle market is comprised of integrated sensors and systems, and CD ROM technologies will set the pace for market adoption in North America.

Land Vehicle Segment Penetration (SA On) Cumulative 10 Year Market 1994-2003

BOOZ • ALLEN & HAMILTON

North American GPS Markets

The surveying, mapping and GIS markets continue to enjoy the highest penetration percentages of all markets. GIS is only now beginning, with networks such as ACCQPOINT and DCI now available nationally.

Surveying/ Mapping/GIS Market Segment Penetration (SA On) Cumulative 10 Year Market 1994-2003

BOOZ • ALLEN & HAMILTON

North American GPS Markets

The air transport market will remain in turmoil for several years as WAAS and other FAA driven programs set the pace for GPS acceptance.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

Careful analysis indicates that with SA On, the largest markets will utilize DGPS corrections, provided by government and private services.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

While the GPS product market dominates projections in the mid 1990's, the picture changes over time. Soon integrated systems and network services become important components of the overall product mix.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

It is possible that the DoD will relax the present policy on SA, an event that will have a profound impact upon GPS markets in most sectors. Some of the market factors with to Zero are indicated below.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

Other satellite enhancements could follow in the late 1990's. Market factors with improved OCS and dual frequency standard positioning service are indicated below.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

With SA to Zero, all categories of performance increase except DGPS4, which loses to other categories.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

All categories of GPS market increase. GPS equipment manufacturing takes a dramatic jump.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

The impact of policy alternatives upon market composition will be meaningful. Changes in market composition are highlighted below.

BOOZ • ALLEN & HAMILTON

North American GPS Markets

Comparison of the data by markets shows a variational impact of the SA policy upon each

Impact of Policy Alternatives Upon Market Composition (Units) Cumulative 10 Year Market 1994-2003

BOOZ • ALLEN & HAMILTON

North American GPS Markets

In summary, the market for GPS and DGPS products and services continues to be an attractive opportunity for manufacturers, developers and systems integrators. With SA to Zero, economic opportunity increases substantially.

BOOZ • ALLEN & HAMILTON