Tele Atlas says TomTom deal a watershed

PARIS Wed May 21, 2008 10:00am EDT

Tele Atlas Chief Executive Alain de Taeye addresses the Reuters Technology summit in Paris May 21, 2008. REUTERS/Mal Langsdon

Tele Atlas Chief Executive Alain de Taeye addresses the Reuters Technology summit in Paris May 21, 2008.

Credit: Reuters/Mal Langsdon

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PARIS (Reuters) - The acquisition of digital map maker Tele Atlas TA.AS by TomTom (TOM2.AS) marks a watershed for the industry with vastly more accurate maps and new products, Tele Atlas Chief Executive Alain De Taeye said.

The 2.9 billion-euro ($4.5 billion) takeover by TomTom, Europe's biggest maker of car navigation devices, was driven by the ambition to combine TomTom's ability to gather information from users with Tele Atlas' maps, De Taeye said.

TomTom has gathered extensive data on maps and driving conditions -- its users submit about 10,000 corrections to maps every day, and a large number of drivers have also allowed the company to gather anonymous statistical data from their devices.

TomTom has amassed 1 trillion data points, equivalent to driving every road in Europe and the United States a thousand times -- information that can improve navigation by choosing a different route depending on the time of day and can also be used for new products.

"They had the mechanism to collect that data, and we had the mechanism to process that data and put it into the map," De Taeye told the Reuters Technology, Media and Telecoms Summit in Paris on Wednesday.

"That is what this transaction is all about...If we put those two things together we can today create something that was science fiction before the deal."

NEW PRODUCTS

Within six months of the takeover closing -- Tele Atlas shareholders have until May 30 to tender their shares -- the company will launch a new generation of products including maps that carry TomTom's data on driving conditions, he said.

The data also opens new opportunities for Tele Atlas' geographical information services business. A buyer may use it to learn what traffic around a property is like throughout the week, for example.

De Taeye said Tele Atlas already offered services to governments, utility companies, planners and fleet managers and would expand those.

Tele Atlas was forced to cut its 2008 forecasts after a weak first quarter, but De Taeye described this as a "hiccup".

"Don't derive from that that there will be a trend change," he said, adding the market for car navigation devices still appeared far away from saturation.

"There is no data point whatsoever that would indicate that we're even close to saturation," he said. Markets such as Japan suggested that the saturation could be significantly higher than the current 15 percent, beyond 50 percent, he said.

(For summit blog: summitnotebook.reuters.com/)

(Editing by James Regan)

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