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ArcGIS supports only serial port connections of GPS equipment.
This is a known limitation.
The National Marine Electronics Association (NMEA) developed a specification for electrical and data communication between various hardware and electronic devices, including GPS receivers. This specification, NMEA 0183, uses a simple ASCII serial communications protocol that defines how data are transmitted in a 'sentence' from one 'talker' to multiple 'listeners' at a time. They are specifically designed to use RS-422 and RS-232 standards and, ultimately, a RS-232 serial port.
The GPS Toolbar included in ArcGIS for Desktop utilizes this standard. With PC/laptop manufacturers abandoning serial ports for USB connections, this poses a problem when trying to use USB GPS devices.
Some manufacturers include an additional driver that makes their USB GPS device appear to other software as if it is connected to an RS-232 serial port. This enables ArcGIS to function with the device, assuming it is using the NMEA protocol. Contact the GPS manufacturer to determine if the GPS unit being used has a driver that does this.
Do a general search on the Internet for 'USB Serial port emulator'. There are a number of manufacturers of emulators that work. Another option is to purchase a USB serial cable. Ensure it includes a driver that makes the USB emulate RS-232.
If the GPS device itself supports only the USB and not the RS-232 serial, the GPS device manufacturer usually provides a driver that does the same thing as a USB-to-serial adapter.