SiRF, the company whose chipsets power some of the world’s most popular GPS navigation devices, is set to cut 7% of its workforce due to losses as the prices of consumer GPS devices continue to drop and sales are below expectations. The cuts come after SiRF announced their first quarter financial expectations have dropped by $10 million and will also result in the closing of two offices-one in San Francisco and the other in Stockholm, Sweden.
The company will also be killing off their in-development mobile TV business due to short-term losses-normal for new businesses, but not something SiRF can absorb at the moment. While mobile TV will probably become fairly “mainstream” at some point, it’s an emerging trend at the moment, and definitely not the business to enter for a financially strapped company.
Om Malik of broadband blog GigaOm believes that SiRF’s problems are indicative of pending disaster in the GPS industry. Being the chipset supplier of popular consumer brands such as Garmin and TomTom, SiRF’s issues are easy to extrapolate to the portable GPS market. This is probably likely in the short term, but long term could see portable navigation devices obliterated by the growing mobile phone market, says Malik. It seems many of the newly released mobile models this year feature integrated GPS functionality or at least the ability to use navigational apps. I can’t see this happening too soon. Maybe in a couple of years when GPS-enabled phones are ubiquitous, but automotive GPS in North America is only in its beginning stages and cell phone GPS will never replace automotive GPS in any practical (and safe) way.