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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 replies on “The dust settles on NOKTEQ”

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.

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)

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.

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.

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!

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?

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!

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