Rise of smartphone fuels boom in Rakon sales

The boom in GPS-enabled smartphones and tablet PCs will see Rakon hit record sales for its GPS technology this month.

Rakon, which specialises in quartz crystal components for GPS, expects to send 6.5 million units from its Auckland factory to mobile phone manufacturers this month.

It will break a previous sales record set three years ago and is more than 60 per cent up on the same time last year.

By October, it expects to grow sales by 20 per cent to around 7.8 million units.

Marketing manager Justin Maloney said September and October were typically Rakon's strongest sales months as gadget manufacturers geared up for Christmas spending.

For the past two years those peak sales months have been hit by the global financial crisis.

"One of the key differences between that peak back in 2007 and now is that back then, the demand was largely driven by personal navigation devices, that's the car dashboard GPS units," said Maloney.

"Now the demand is being driven by smartphones and tablet PCs.

"Personal navigation devices are still pretty important but the bulk of that demand is now in these connected devices."

Consumer enthusiasm for feature-rich smartphones has been partly driven by Apple's iPhone and iPad devices.

In the three months to 30 June, shipments of smartphones hit 60 million units, according to Strategy Analytics.

Nokia, which made its GPS programme free to its smartphone users earlier this year, still dominates the smartphone market with 40 per cent share, but Apple's hugely popular mobile devices have seen it achieve year-on-year growth of more than 60 per cent to hold 14 per cent market share.

Rakon is coy on naming which manufacturers use its components.

This week, the company announced the €400,000 ($716,000) acquisition of the assets of French space technology firm Temex.

It said the move would allow it to work on applications such as Galileo navigation satellites and transportation vehicles for the International Space Station.

Rakon's share price closed yesterday up 3c to 98c.