The dust settles on NOKTEQ

The Analysts views on the Nokia offer for Navteq makes some interesting reading. Now that the initial excitement is over, the collective view as excellently summarised by Adena at All Points Blog is in some ways surprising.

NokTeq

On many occasions these industry experts describe Navteq and for that matter Tele Atlas as GPS companies, clearly demonstrating a lack of understanding of the GI / PND market.

Navteq and Tele Atlas are classic examples of the “Data is the Intel Inside” O’Reilly-ism, provided a crucial element to a larger solution not just in the navigation space, but to a lesser extent web-mapping, and even professional GIS. It’s interesting however that neither company while still independent was able to achieve brand recognition, to the extent it registered with the consumer – one did not hear “Sorry I will only buy your device if it has Tele Atlas data”.

Clearly Nokia are positioning Navigation, Maps and LBS even as a major part of their offering, in Europe marketing a Nokia PND which competes directly with Tom-Tom. But Nokia (and Tom-Tom) realises I’m sure that the future of personal navigation will increasingly be off-board navigation delivered to mobile devices perhaps delivered through channels independent of both the mobile industry and the automotive industry who are too conservative in their approach.

For the PND potential alone this deals make sense for Tom-Tom and Nokia as they provide control over a major cost of their solutions, what will be interesting in the future will be the relative contribution made by “Cloud” collected data, as organisations like OpenStreetMap, and the new generation of devices start to collect data themselves as they are used. If this grows as rapidly as some expect, it will make there acquisitions appear even more expensive.

Written and submitted from the BA Lounge, Heathrow Airport, using the BTOpenzone 802.11 network.

14 comments

  1. Duncan Garratt

    It is hardly appropriate to describe Navteq, as a GPS COMPANY, that label should be awarded to Trimble. What is significant is that as with music and film, quality content will always fetch a premium and digital map data is no exception. It should come as no surprise that the hardware and software giants of this world are interested in acquiring quality content. What are significant are the underlying technologies that are used in the production of map data and in particular the efficiency gains such new technologies make in the commercial production of digital map data. In the last twenty years GIS technologies has progressed in leaps and bounds. What will the next twenty years bring and how will that effect digital map production? The fundamental question for these giants is; Is it better to wait and run the risk of losing market share or pay for expensive content now via acquisitions or otherwise and run the risk of buying expensive data that could be obsolete in a few years? It’s a tough question and one that will be driven by market position and their quest in securing/maintaining channels of distribution in relation to their end products.

  2. glenn

    I’d look for Nokia to roll out Nokia Maps essentially as an application development framework/platform, similar in thinking to what they have done with N-Gage and the gaming platform. Recall they recently announced OVI (doorway) which apparently will be home to the maps, gaming and other development frameworks. No doubt since they can’t make money from data throughput of map users they will be selling enhanced datasets for the Maps platform and adding in mobile advertising (think Flash) ala Flash Lite 3 which was also just recently announced along with, what else, a Nokia/Adobe developer resource… Nokia is indeed a sleeping giant that is quickly waking up – cheers, Glenn (I saw this coming.. why else would we have created symbianone.com & LBSzone.com 4 years ago ;0)

  3. Thierry

    If outsiders call a data company a GPS company then to be fair they are only marginally worse informed than us in the professional GI community… It seems to me that many of us also keep talking about GIS, tools and IT architecture rather than the data inside – despite best intentions. At the end of the day this is just one technology company buying another, and take-overs always need to pay a premium to shareholders.

    GI is not such a difficult world to understand (the difficulty for others may be to realise that in fact it is quite simple!). If we don’t understand such a huge price tag it’s perhaps again an indication that we have less grasp of their business world than they have of ours. I have to declare my bias – Nokia and Shell have their chairman in common – but it would surprise me if they didn’t know what they’re doing. I think they know perfectly well – and poking fun at the iPhone is just a diversion tactic.

  4. Daniel

    I suppose one has to realize that these so-called ‘industry experts’, aren’t industry experts at all. This is probably why I’ve been relatively vocal about that particular issue when commenting on a couple blogs here and there.

  5. Duncan Garratt

    Daniel you are so right about so called industry experts not knowing their stuff, as they say the devil is in the detail! It is rare these days that you get a real techi presenting or making the business case, instead companies are opting for PR/Sales people with a bit of technical knowledge. I suppose a pretty lady or smart gent is more photogenic/presentable than scruffy programmers who know their stuff! The captain of a ship with all his gold braid is far more presentable at the dinner table than the chief engineer in his boiler suite yet they are of the same rank. The captain just gives the orders, what do they know about engines! Not a lot! As they say vanity sells!

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  7. JC

    With large sums of money recently being paid for data companies, the question is going to be in the endis it the data that is the key differentator, or the services that deliver it to the consumer in engaging ways?
    Yes, hardware and service providers do not want to be held hostage for quality content, but will the maintenance and development of the content continue downstream when it is viewed as a commodity?

  8. Duncan Garratt

    What’s next? Apple in partnership with Ordnance Survey to provide mapping on the iphone perhaps!!! I doubt even Apple would want to pay Ordnance Survey commercial pricing and it’s a sure certainty Nokia would not supply Navteq data to Apple! So where does that leave the independents who write tracking systems? It could get very interesting!

  9. Ed

    Hi Duncan – I’m not so sure..

    OS and Apple no I don’t see that as it does not scale as a relationship, OS only has data for England, Wales and Scotland… However I don’t think a Nokia owned Navteq will be so quick to cut off supply to other manufactures. Both the Tom-Tom and Navteq deals I think are more about cost control than restricting the market.

    ed

  10. Duncan Garratt

    Hi Ed

    Your view on cost control is very valid, but as a lot of us are aware there is a technology race going on in the mobile market place. In the more mature markets such as Europe and the US added value services are the key to making extra profits and increasing the monthly spend on mobile phone services by the consumer.

    In this respect this is a smart move by Nokia despite the price because they control the hardware and premium map data. I welcome the Nokia/Navteq tie-up, although it may squeeze some who are writing mobile tracking software. If Nokia were to produce a phone plus software (GPS/GPRS) with inbuilt mapping, and bundle it with a GPRS server as a Windows service or an http get with its own API as a developers kit, this would open the way for developers to focus entirely on backend systems and the business logic of tracking systems without having to worry about the mobile device, mobile software and mapping running on the device.

    There is now a golden opportunity for Nokia to leap frog the mobile phone competition by providing the core elements both in terms of hardware, mobile software, and mapping. Your article regarding your visit to the Inform Norden conference clearly illustrates what is possible, but as with all such systems if they are to be a success either the system has to be completely open or the solution supplier has to have a dominant market share where customer critical mass is achieved for a solution to be viable.

    With global warming becoming an issue, life styles will have to change and in particular how we travel. The core building blocks both in terms of hardware, software and data will be crucial, and are the foundation for building advanced integrated mobile location based solutions. In this respect Nokia now tick all the boxes, where Apple and others do not!

    I do believe in the coming years it will be the private sector that takes the lead, as governments wake up to the fact and the significance of global warming and the implications for travel! It hasnâ??t happened yet but in the next five or ten years politicians are going to start to press the panic buttons and Nokia will be one if not the major technology company who are in a near perfect strategic position, not only to provide integrated mobile solutions but equally important in a position to deliver!

    The key element for Nokia will be the ability to embed their map data on their mobile devices, where the competition will be reliant on providing map data from a server. Even with bandwidths increasing the backbone and mobile communications networks in most countries will not meet the data volumes required for slick mobile mapping solutions for at least ten years minimum and you still have the problem of network coverage. In this respect Microsoft and Google missed a trick here by not acquiring Navteq.

    I do believe Nokia has slipped under Microsoft and Googleâ??s radar in the battle of location based data and mobile mapping solutions, as both Microsoft and Googleâ??s location based technologies are totally reliant on server technologies and the communication links between client and server, where a future Nokia solution would only be partially reliant by way of the application running client side.

    In this respect regarding global warming and the trend regarding international integration and connectivity I believe will turn in favour of self-sufficiency at a national level and local levels as the effects of global warming start to bight, this is already happening in the energy sector as European countries are becoming over reliant on natural gas from Russia. I do think one of impacts of global warming will be to force countryâ??s to look at resilience and theyâ??re over reliance of server-based technologies. As an old warhorse of the Cold War I am only to well aware of electronic warfare and the electronic vulnerabilities of many systems. Equally we have already seen how vulnerable some of the UKâ??s key infrastructure is with regard to the floods etc and highlights just how fragile our current way of life is.

    The GPS signal is extremely difficult to jam, this is because it was originally designed as a Cold War nuclear missile navigation system. It is a very different story for GPRS and WiFi and where would that leave server based navigation systems. Equally if nuclear war was a reality the EMP would knockout most electronic navigational systems so perhaps there is still hope yet for Ordnance Survey and their paper maps!

    Whilst I donâ??t want to appear alarmist, strategic resilience will be an important factor in the future something that seems to be forgotten by many since the end of the Cold War. Just cast your mind back to 1970â??s and the three-day working week and electricity cuts. What impact would that have today or in the near future with our over reliance on electricity and IT systems? In this respect having navigation system on your phone that can work on battery power even if the phone system is down makes a lot of sense and who are now best placed to provide such a solution? Nokia, Tom Tom!

    Duncan

  11. Tony Battle

    God help any of us who are good looking, well educated, adn leaders of industry. Not that I am any of those. Let’s not tag the GI profession as being fake. Vanity does sell: bottom line. However thoe good lokking folks may also be damn hot in GI.

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