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Last Updated: Tuesday, 20 June 2006, 12:38 GMT 13:38 UK
Philips challenges rival Tomtom
Philips headquarters
Philips says the navigation market is "one of the fastest growing"
Consumer electronics firm Philips is to begin making mobile personal navigation systems, challenging dominant specialist Dutch player Tomtom.

Tomtom has about a 50% share of Europe's navigation market, which is tipped to double in size in 2006.

Philips will start to make three new products from September, with prices starting from 400 euros (273; $502).

Mobile navigation devices enable people to know exactly where they are and to plan where they are going.

Philips' move will "contribute to the commoditisation of these products", said Marc Kennis, an analyst at Bank Van Lanschot.

The new items, which will be 2cm in thickness, will be available as consumer electronics devices through the firm's existing network of retailers.

The move by Philips comes after Japanese firm Sony entered the European market earlier this year, following specialist firms such as Tomtom and Garmin.

The decision by Philips to target this growing market comes after it abandoned the navigation market seven years ago.

Back then, the firm said car firms demanded entire dashboards fitted with electronics, which was not one of its key businesses.

The firm explained its decision reversal by saying: "It's one of the fastest growing markets."

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