More GPS-enabled handsets will ship this year than standalone navigation devices, IMS Research said today.

Carriers, phone makers and software vendors are all working to make it happen.  Carriers like the potential for new kinds of premium services, GPS chip prices are decreasing and software overall is becoming more open, IMS analyst Patrick Connolly explained.

Compared to the cellular phone market, “Despite the huge success of [standalone GPS devices] there is still a comparatively small installed base of users, leaving plenty of market upside. Both of these markets will continue to grow concurrently in the medium term, but importantly, they are not independent. Already, companies such as NiM, Telmap and TeleNav are seeing increasing subscription numbers for their cellular sat-nav services. Clearly this is at the expense of the [standalone] market,” he said.

However, standalone devices continue to get new features such as real-time road traffic updates, speech input and output and 3-D mapping.  Standalone units also don’t have the problem of confusion when incoming calls arrive during a GPS session.