Industry explores new roads with free maps
BARCELONA/AMSTERDAM (Reuters) - The satellite navigation industry is looking for direction now that Google and Nokia are offering free maps on smart phones, with the issue a hot topic at the Mobile World Congress industry fair in Barcelona this week.
Nokia, the world's largest cellphone maker, last month followed Google in offering free maps on some 20 million cellphones, directly impacting the navigation business across the globe.
Analysts say it has already had a clear effect.
"Navigation on phones was an industry, now it is an application, an application for free," said Tim Shepherd of industry consultants Canalys.
Nokia said on Monday 3 million consumers have downloaded the free navigation package, spurring sales for the company's services unit and raising confidence it can reach its 2011 sales target of 2 billion euros thanks to the fees it charges Nokia's handset business.
At the same Nokia's and Google's move to offer free maps may or may not creates opportunities for other parts of the industry.
"We do have a Plan B, but I cannot give any details yet. We will make announcements later this year," said Gerhard Mayr, vice president for the global phone business of Navigon, Europe's third biggest seller of personal navigation devices (PNDs) after TomTom and Garmin.
"We now see an increase in appetite for our solutions," said Mayr. "We are in discussions with several parties."
And others are trying to make the map more than just a map.
"We build our own map," said Noam Bardin, chief executive at Waze, which provides a mobile application for free turn-by-turn navigation based on live road conditions.
"Real-time data is where the value is. No software can tell you there is ice on the road or take the right side of the parking lot, because the left side is full," Bardin said.
MAPS ARE CRUCIAL
Dutch navigation device maker TomTom and its U.S. main competitor Garmin have seen their share prices plunge since first Google announced in October it would offer free navigation on its Android-based phones and then last month Nokia followed suit with its own smartphones.
Investors fear that TomTom, which will report fourth-quarter results on February 18, may never earn back the 2.9 billion euro ($4 billion) it paid for digital map maker Tele Atlas in 2008.
And Nokia bought Tele Atlas's rival Navteq the same year for $8.1 billion.
"The map has become the crust of the pizza, where others can add toppings to it via applications," said Maarten Oldenhof, chief executive at Dutch firm Automotive Navigation Data.
AND, which has a market capitalization of a little more than 20 million euros, is working on an alliance with other map makers to create a global alternative platform.
"The general perception now is (that) the map is crucial ... I am convinced there are ways to create a business model where providers can use maps and the map provider will receive a revenue split. That will be the future," Oldenhof said.
(Editing by Greg Mahlich)
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