The rapidly growing smartphone market is providing a much-needed boost for handset-based turn-by-turn navigation.

While PNDs and in-dash navigation device sales continue to suffer from the economic recession, the number of paying handset-based turn-by-turn navigation users will increase to 26 million by the end of 2010, according to ABI Research.

The Asia-Pacific region is forecast to experience the strongest growth.

ABI Research practice director Dominique Bonte said that in the wake of a continuous stream of eye-catching touchscreen smartphone launches, navigation software developers are rushing to port their solutions to as many new platforms as possible.

These includes Android (ALK, Telenav) and the new Palm webOS (Telenav).

But it is Apple’s iPhone that is causing the biggest waves.

"The most significant driver for the uptake of handset navigation is expected to come from the iPhone, following Apple’s decision to finally enable turn-by-turn navigation on its latest 3.0 platform version," according to Bonte.

Software from TomTom, Sygic, AT&T (Telenav), and Networks In Motion is already available from the iPhone App Store, with Navigon’s solution expected soon.

ABI Research’s report said that while application stores are expected to become an important channel for the distribution of navigation software, many carriers and handset manufacturers prefer to pre-install or bundle navigation software with their phones and offer plans based on strategic partnerships with navigation developers.

Examples include Verizon/NIM, AT&T/Telenav, Vodafone/Telmap LG/Appello, HTC/ALK Technologies, and Samsung/Route 66.

Market leaders Nokia and Vodafone have respectively opted to acquire navigation providers Gate5 and Wayfinder, allowing tighter integration of navigation and LBS services into their portfolios. Both approaches often coexist.

However, Bonte believes that several barriers still remain in place: "High monthly subscription fees and data roaming costs will need to be addressed for off-board navigation on handsets to reach high penetration levels."

Free ad-funded navigation is one possible way forward with Locationet’s Amaze solution powering Technocom’s SpotOn GPS platform, Huawei’s new GPS phones, and Bouygues’ free navigation offer in France.

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