One of the items waiting in my Inbox this morning was a new report from ABI Research, predicting that by the end of 2008, 25 percent of WCDMA handsets will include GPS capabilities.

The research firm gives four main reasons why it thinks its prediction is accurate:

• Regulatory requirements are inducing vendors to include GPS in their products

• Staying competitive may require adding GPS

• GPS may be attractive to carriers looking for a way to increase ARPU and recoup costs associated with licensing 3G spectrum

• Consumers increasingly are demanding applications, such as portable navigation, that require GPS

ABI thinks that GSM carriers will begin issuing RFQs for GPS during 2007, which will be followed by vendor selection. By the end of the following year, ABI predicts, average selling price of GPS chipsets will drop to $2.70.

In the report. ABI analyst Alan Varghese notes that, for the past several years SiRF has been the leader when it comes to GPS integrated circuits. But he predicts that the company will soon be facing competition from Amtel (based in California)/ublox (based in Switzerland), Global Locate (based in California), GloNav (based in California), Nemerix (based on Switzerland), Texas Instruments (based in Texas) and uNav (based in California).

On the consumer end of things, I would predict that GPS is most attractive for the same reasons cell phones are in demand: convenience and safety. For convenience, GPS enables map-based applications. For safety, GPS applications (like OnStar, for example) help emergency responders quickly locate people in danger and deploy appropriate help in a timely manner.

Only time will tell whether ABI is correct in its predictions, but it’s not outside the realm of reasonableness given the trend is toward communications devices that perform many functions (PDA and phone, for example).

What do you think?