GPS To Boost Cell Phone Sales

Spending on call phones, currently in the process of passing landline spending in the United States, is poised to get a turbocharge from navigation services based on GPS, according to a survey announced Thursday.

Leo J. Shapiro and Associates (LJS) found that Americans want GPS on their cell phones more than they want Internet access on the phones. Coupled with recent U.S. Labor Department statistics that reveal the crossover of phone spending from landline to cell phone is under way, the LJS survey indicates cell phone spending is likely to continue to grow in a sharp upward trajectory.

Moreover, GPS is a relatively unclaimed territory because it's appealing to a broad demographic and not just a narrowly concentrated segment of the population.

"GPS is displaying a rapid and unusual pattern of diffusion," LJS VP Owen Shapiro said in a statement. "Today's GPS-enabled devices are being widely adopted, including among the middle-aged and elderly."

The market research company sampled 450 Americans across the United States and found that 24% want GPS on their next cell phone, while 19% want Internet access. Just 6% of GPS users, many with car-based services, have the technology on their cell phones, LJS found, indicating there is a pent-up demand for GPS on cell phones.

In recent days, the Labor Department published statistics showing that the average annual household cell phone spending was $524 in 2006, almost as much as the $542 that the average family spent on landline phones. The total average overall cost per family of telephone usage was $1,087, the Labor Department said. The total figure also included $21 for miscellaneous phone services including phone cards.

The Department's Bureau of Labor Statistics' Consumer Expenditure survey found that cell phone expenditures increased rapidly from 2001 through 2006.

As an example of the robust cell phone growth, Verizon Wireless' wireless revenue increased 15% to 20% annually over the past five years while landline business remained flat during the same period, The Associated Press reported, adding that a Verizon Wireless executive noted that more than 90% of families already had a land line.