Nokia Buys Navteq for $8.1 Billion

mytrip writes to mention that Nokia has agreed to buy Navteq, Chicago-based maker of digital mapping and navigational software, for $8.1 billion. "Nokia's president and chief executive, Olli-Pekka Kallasvuo, said that location-based services were a cornerstone of Nokia's Internet services strategy, which is part of an overall plan to expand beyond the production of cellphones into user services like photos, video, music and games."

Google Maps et al affected?

I know Google Maps (and I believe others) use data provided by Navteq (so the bottom of the maps say). I wonder if this purchase will affect them in any way?

Re:Google Maps et al affected?

No. But it may make a future acquisition by Google more attractive.

Re:Google Maps et al affected?

Highly doubtful. Check out Nokia's stock ticker ... just the value of Nokia's stock is 98% of Google's stock, not to mention Nokia holds a lot more **physical** assets than Google. Similar cash-at-hand, much more revenue per year. If Google would want to make a purchase of Nokia (Nokia being a healthy company), they would have to up the ante and offer the stockholders **more** than the company is worth. Sure, they can take out a loan, but they would essentially run the company dry. The interest on a few hundred billion dollars (Nokia's stock alone is worth 120B, Google's cash-at-hand is less than a tenth of that) a year would be billions of dollars a year. Google can't afford that. To put it another way, their revenue last year was 13B. The interest on a loan for Nokia would probably run a third to half that.

Re:Google Maps et al affected?

Google acquiring Nokia? That's a laughable notion at best. Nokia is the largest wireless network hardware and phone company in the world. Some would say they're sitting on top of the biggest goldmine there is in tech or least consumer electronics. And they only seem to big extending the gap with their competitors more and more (look at Motorola's last quarter vs Nokia's). For Americans here who don't know, by the way, Nokia is far and away the largest builder of the networks wireless services are provided by -- phones are only the smaller part of their business, yet they are the largest phone maker in the world too.

Internet tablets

This raises some interesting possibilities for where nokia's going with the next installment in their line of internet tablets (the Nokia 770/800/rumored successor to both). Navteq's software already runs on the platform, so it may be that nokia's thinking of integrating it more fully into their internet tablets (the next one is rumored to have built-in GPS).

Not many guys RTFA

but what's the deal with a broken link back to slashdot? For once in a long time, I wanted to read the actual article, and this is what i get :(

Killer App

I have a Nokia 6682. I bought a bluetooth GPS receiver for $60 and downloaded Route 66 (for "free") on it and it has been a fantastic GPS device for me. I would never drive without such a phone anymore. I actually like it more than any dedicated GPS device which for a decent one could easily take $500 as mounting a normal GPS would be a pain (and too easy to attract thieves to break your window and take it). With a cell phone based GPS, it's easily attached to the vent (holder included with the receiver), and really portable.

If Nokia provides gps software out of the box, it definitely will be the biggest factor for my purchase decision.

The press release, Tele Atlas and more

Here's the official press release [nokia.com]. There's additional articles on Bloomberg [bloomberg.com] and TradingMarkets [tradingmarkets.com].

This news was predicted after TomTom bought Tele Atlas [teleatlas.com] last July, NAVTEQ's main competitor.

This is bad... Very bad.

Nokia has a bad habit of purchasing companies that develop software and products for their competitors and then killing said products.

For example, a few years ago they bought out a PalmOs developer (who at the time made NOTHING for Nokia phones) and then killed off all of that developer's product lines. (If I recall correctly, it was one of the developers of instant messaging applications.) I don't remember the name of the developer off of the top of my head.

Now, I don't foresee Nokia killing off Navteq product lines in a similar manner, but I wouldn't be surprised if it becomes a LOT harder for people who develop software for Windows Mobile or PalmOS to license Navteq data. (It's hard enough to license Navteq data as it is...)

NavTeq made out like bandits here.

Anyone who has used any of their products can tell you that without the mapping data, they are absolute crap. Their server platforms are all garbage lagging badly behind everyone else in the industry with no hopes of every catching up. However, while their data side is quite solid it's not a position one can live on forever. Road/Map data doesn't change that often and it is possible for anyone else to recreate it given the time and resources. If I was sitting up high at NavTeq I'd be patting myself on the back for this deal.

Nokia continues to show they have no idea about how or what to acquire.

8.1 Billion with a B?

Is anyone else getting completely blown away at the sheer value of some of this takeovers? The amounts of money flying around the world in these corporations is mind blowing.. Must just be my poor little ass being unable to fathom that much cash... :/

Re:8.1 Billion with a B?

Although I'm sure you were joking when you said "cash", here's an idea of how that much cash would look.

http://www.guardian.co.uk/Iraq/Story/0,,2008189,00.html [guardian.co.uk]

Considering that this is 2/3 as much ($8bn vs $12bn) you could scale down and say that if this were presented as packages of $100 bills, it would weigh approximately (363*2/3) = 242 tons.

It's somewhat annoying to measure cash in "tons of $100 bills" and to think that none of it going to me ;(

Lucky bastards

Stories like this always make my skin tingle because one of my goals in life is to start a software company and get bought out by some giant. You'll never get rich by working for someone else. I'd be happy with 8.1 million.

Could be a big problem for GPS systems

A significant number of GPS systems that run on phones that compete with Nokia use Navteq maps. Could or would Nokia stop licensing Navteq maps to non-Nokia phones? I find this troubling.

Not a good idea

I'm not sure that this is such a good idea. Time and again, operators have made clear the fact that when a mobile phone manufacturer tries to package this kind of application with their phones, the application will be "evaluated" against the operator own offering. In this case, it means that the operator will remove the original mapping application and will install its own instead, The common justification is that it allows the operator to standardize on a single application across a wide range of devices. Of course the real reason is that operators don't want mobile phone manufacturers to get into services.

So Nokia may find that they cannot distribute their own application. Of course, Nokia is a very well-run company, so I guess that they foresee some benefits in this move. However, like any large company, they can make some pretty bad moves at times (N-Gage...)

Shameless plug...

The timing of this is interesting.

At the weekend I put out some code for a Series 60 GPS mapping application I've been writing: JohnJohn [launchpad.net]

Its in python, inspired by maemo-mapper + in its early stages, but already reasonably useful.

By default it uses openstreetmap.org as its source of maps, but you can configure it to use other repositories.

No documentation at all as yet, apart from the code, but hope to get a README out there soon.

Kudos to nokia here, I hope this shows the power of having phones you can write code for. Having python available on series60 is just the icing on the cake.