The market for GPS navigation and location technology could provide some much needed cheer for the semiconductor industry as it moves into 2009.

According to a report from IMS Research, the GPS market is forecast to increase by over $200m between 2008 and 2009.

“Last year was the breakout year for GPS in mobile phones. In 2009 GPS will begin to penetrate into a range of vertical markets, such as cameras, laptops, sporting equipment and first responder radios. This will help to drive shipment growth of over 25% year-on-year,” said IMS Research analyst, Tom Arran.

IMS Research is forecasting the overall market for GPS to demonstrate a 21.2% CAGR between 2008 and 2013.

“Location is emerging as a key component of future offerings from companies such as Google, Microsoft, Apple, Nokia, Intel, Mozilla and Ericsson. This will enable a host of new services across all key vertical markets, which in turn will further drive the uptake of GPS,” said Arran.

But he also sees technical challenges ahead. “There is still a lot of untapped potential and the GPS market needs to mature before breaking the 500 million units per year barrier. One of the more general issues is poor performance in challenging environments. GPS manufacturers need to start seriously considering hybrid location in their offering,” said Arran.

The report is titled: WW Market for GPS/GNSS in Portable Devices