October 08, 2007
Nokia Will Acquire NAVTEQ
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Nokia Will Acquire NAVTEQ
by Susan Smith
In a press conference held on Monday, October 1, Nokia and NAVTEQ announced an agreement for Nokia to
acquire NAVTEQ. According to the press release, “Under the terms of the agreement, Nokia will pay $78 in cash for each share of NAVTEQ including outstanding options for an aggregate purchase price of approximately $8.1 billion (euro 5.7 billion), or approximately $7.7 billion (euro 5.4 billion) net of NAVTEQ existing cash balance. The acquisition has been approved by the board of directors of each company and is subject to customary closing conditions including regulatory approvals and NAVTEQ shareholders' approval.”
Navigation is a rapidly growing market which Nokia is capitalizing on with its mobile devices. More than 900 million people are using Nokia devices around the world. With the addition of NAVTEQ, Nokia will be able to offer advanced mapping data on those devices as well as “innovative, context aware Internet services.”
According to Nokia president and CEO Olli-Pekka Kallasvuo, location based services (LBS) is the cornerstone of Nokia’s strategy. Location context will add value to many Nokia services and devices. Nokia and NAVTEQ customers will also benefit from building navigation systems for industry partners.
With the acquisition of NAVTEQ, Nokia’s plans are to broaden from mobile navigation devices to pedestrian navigation and automotive navigation systems, internet-based mapping applications and government and business solutions.
What NAVTEQ brings to the table for Nokia is a great team with maps and navigation industry expertise, strong customer base and an industry leading map data and technology platform with broad geographical coverage.
NAVTEQ CEO Judson Green said that company is the “leading global provider of digital maps and digital content for wireless location based services application and navigation, licensed for use in customer’s devices.” NAVTEQ has released maps of 10 new countries this year. “In addition, we continuously build out and expand countries in our databases, adding 3D imagery, real time traffic information and points of interest.” The company is headquartered in Chicago with 3,000 employees in offices around world.
Green described NAVTEQ as being “uniquely positioned in multiple growth markets around the world.” NAVTEQ customers are touched more than 1 million times a day.
Further, NAVTEQ data provides navigation to customers in the form of street names, addresses, turn restrictions, and one way streets. “The only way to insure our maps depict reality is for our analysts to drive roads every day,” said Green. They collect over 200 new features every day.
Every car manufacturer in Europe and North America uses NAVTEQ in at least one car model. Green said that one half of all the portable devices sold in the first half of this year have been NAVTEQ equipped. Business of all kinds and government license NAVTEQ data on the web, bringing an enormous customer base to Nokia. Google, Yahoo and Microsoft all want to offer directions and maps and advertising to consumers beyond the desktop yet they don’t know how to make their own maps and must buy their maps from NAVTEQ and its competitors.
Nokia, with its 900 million mobile device owners, has been in telephony for the past 20 years. Mobile devices are becoming the “most popular way to share content,” according to Anassi Vanjo, head of the Multimedia Business Group at Nokia.
Nokia is aware that their users note the “new usefulness of the internet,” said Vanjo. “Location and context information are key components in search, navigation, videos, and location information helps build the next phase of the web.” Nokia will be marketing a new offering to include the areas of entertainment, communities and location based services. Their new GPS enabled Nokia N95 multimedia computer will ship with the Nokia Maps solution, a location based services solution.
Nokia sees having the map data and consumer services under one roof as a very powerful combination to give them “incremental advantage in the location based services business.”
Nokia mentioned “pedestrian based” navigation numerous times, by which they must mean in the commercial sense, being able to find your friends via the map on your device. The navigation device will allow you to create your own media, photos and combine that with map data. Not all products will have GPS but all the devices connected to the Internet can benefit from map information.
NAVTEQ data can be expanded faster, according to Vanjo. Its open APIs make it more valuable to customers. The combination of the two companies’ assets will allow Nokia to serve both sets of customers, and the acquisition allows NAVTEQ to continue its investment in its database.
In the Q&A period following the press audio conference, the question was asked if the
acquisition of TeleAtlas by Tom Tom that was announced in July influenced this announcement by Nokia and NAVTEQ. TomTom is the world’s largest maker of car navigation devices, and Tele Atlas is NAVTEQ’s main mapmaking competitor. Tele Atlas incidentally sold to Tom Tom for $2.7 billion to NAVTEQ’s $8.1 billion.
Nokia did not reply directly to the question, but replied: “We are moving on our consumer internet services. We’ve been doing acquisitions and a lot of internal investment things There is an explosion in mobile device industry and we are recognizing the brand of both companies together.”
Nokia also stated that factory installed navigation such as that found in the automotive industry as well as the untapped personal pedestrian navigation (PND) market were driving their decisions.
Questions about the pricing of map data arose. “Pricing will be competitive. We will move to make this more available to more devices around the world,” said Green. “The space is getting complex, a map is not a simple thing. There will be more content added to the underlying map which does give the opportunity to price separately from the underlying map.”
Kallasvuo said that this time next year handsets will have GPS, and Nokia will “play the game with open [source], we will have APIs so other companies can participate. We are all lost every day. We want to find places, and find people. Nokia will generate a completely new open business arena.”
NAVTEQ’s map business will become a wholly owned subsidiary of Nokia. After the acquisition it will continue to be operated independently.
Nokia Does a Map Deal, Signaling Strategic Bet by Laura M. Holson, The New York Times, October 2, 2007
Top News of the Week
Urban and Regional Information Systems Association (URISA) and the
National Emergency Number Association (NENA) have announced a new name for its joint conference. The 2008 conference will be the first one presented under this name: The URISA/NENA Addressing Conference. The conference will take place April 7-10, 2008 in Portland, Oregon.
North West Geomatics Ltd. and
Airborne Imaging announced that they have executed a Letter of Intent to combine their existing LiDAR library data in western Canada and to begin joint LiDAR collection for areas not yet acquired. The immediate goal is to complete LiDAR acquisition for substantially all of the province of Alberta, NE British Columbia and portions of southern Saskatchewan.
You can find the full GISCafe event calendar here.
To read more news, click here.
-- Susan Smith, GISCafe.com Managing Editor.