Global positioning systems (GPS) typically found in military gear or in pricey consumer electronics may make its way into common, everyday gadgets thanks to new breakthroughs.

Chip manufacturers now have solutions in place that allow the integration of GPS in handsets at lower costs, and provide significant improvements in terms of accuracy, time-to-first-fix, and reception in indoor environments, according to analysts at ABI Research.

Recent industry developments will ensure that prices for GPS-enabled handsets quickly come down, said analyst Shailendra Pandey with ABI.

Pandey speculates that in coming years it will be more cost effective for manufacturers to have GPS in a large array of devices, rather than just a few handsets. As a result, the wholesale ASP (Average Selling Price) of GPS-enabled handsets will fall under $200 within 2 years.

Recent developments in the chip industry are leaning towards cheaper GPS systems.

Vendors such as CSR and SiRF have developed solutions that will bring down the cost of integrating GPS in handsets to under $2.

Other vendors, including Broadcom, have plans to integrate GPS with Bluetooth and to offer a single-chip solution. Current GPS-enabled handsets typically are CDMA devices, but these solutions will also allow the integration of GPS in GSM and WCDMA handsets at much lower costs.

The news may come as a relief for SiRF, one of the industry's largest providers of GPS circuitry, after a disappointing earnings report this week.

The firm saw its shares fall after it reported an 89% decrease in fourth-quarter profits to $0.7 million from $9.1 million the year before. The company also gave a miserable outlook for the first-quarter, predicting a loss of 4 cents per share on revenue of $71 million to $77 million.

Adam Benjamin of Jefferies does not doubt that GPS will become more prolific, but it may not turn out to be the golden goose manufactures like SiRF are dreaming of. I think over time you will see GPS in all handsets, he said, but the question is 'who is going to benefit from that?

I think over time you will see GPS in all handsets, he said, but the question is 'who is going to benefit from that?

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