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Mike Dobson of TeleMapics on Local Search and All Things Geospatial

Nokia, Garmin, Navteq, TeleAtlas – the rumors fly.

October 8th, 2007 by MDob

Last time I wrote about Nokia and Navteq and mentioned Garmin in passing. Part of my consulting practice deals with financial companies and their interest in understanding the market for mapping, navigation and geo-enabled devices. It is clear to me that the financial companies don’t think the action has yet settled.

As you may know, there is some belief that TomTom may have to increase its share price for TeleAtlas, which is now trading over the bid-price offered by TomTom. In addition, a European financial company has amassed a 6 percent ownership of TeleAtlas. Other arbitragers may be doing the same. Much of the uncertainty is being credited by the market pundits as a reaction to the fact that Garmin’s hand has been forced and it must do something to respond to both suppliers of navigable map databases.

Garmin has been punished in the market for its lack of enthusiasm to make a counter bid for either Navteq or TeleAtlas and its share price declined over 19 percent during the week after Nokia’s offer for Navteq. Many analysts now feel that even if Garmin did not have a strategic interest in acquiring a mapping company that it might now have a justifiable financial incentive to move on one company or the other.

Of course, Garmin has several options. It could bid for Navteq, bid for TeleAtlas, work with Nokia/Navteq to strengthen guarantees in existing contracts, build its own navigable database, or look to be acquired by someone else!

Today, Garmin’s stock price (GRMN) shot-up as a rumor hit the market
that Microsoft is going to take a run at Garmin. Doesn’t sound likely, but this is an unusual situation it may explain why Garmin has not responded to significant changes in the mapping market.

Now, how does this all relate to User Generated Content and map updating? In my last blog, I mentioned that the claim by Nokia that it had 900,000,000 users who could contribute to map updating seemed a bit off the mark. Yes, Nokia has that many phones in the hands of consumers, but it will be next the next generation of phones (like the N-95) that will be required to build a UGC app that will be on much interest. However, the major problem is that Nokia does not own the customers using their phones. Instead, the cellular carriers have the relationship with these customers and it is unlikely that they are going to allow a data updating relationship between Nokia and their customers without a something in return…well, maybe a lot in return. Also, if Nokia pursues making Navteq a ubiquitous routing platform and one that involves UGC, the carriers will also want a piece of that action. In other words, the way forward for Nokia and Navteq is not without its challenges.

So how does Garmin play into this conundrum? Simple. It strikes a deal to be Nokia/Navteq’s UGC partner in the Personal Navigation Device world. Taking this action helps all three companies enable User Generated Content for map updating. It helps Garmin stay on a par with TomTom (MapShare) and allows Nokia/Navteq to get some real-world experience in creating a workable UGC platform.

There is, of course, an alternate ending. Perhaps Garmin decides to go it alone and create its own navigable database. Who would it work with, how could it do it? Garmin has always pursued non-traditional approaches, so perhaps it is thinking…Zenrin!

Well, so much for the speculation, next time (unless the news intervenes again) I want to examine the methods that could be used build a compelling UGC strategy for map updating.

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Posted in Data Sources, Garmin, Geospatial, Mapping, Microsoft, Navteq, Nokia, TeleAtlas, TomTom, User Generated Content

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