Google creates roadblock for TomTom, Garmin, Nokia

* Google entry jolts industry

* TomTom, Nokia may suffer from Google's road data gathering

* Fears of stiff competition hit TomTom, Garmin shares

By Harro ten Wolde

AMSTERDAM, Oct 30 (Reuters) - Google's (GOOG.O) foray into phone-based navigation makes it unlikely that TomTom (TOM2.AS), Garmin (GRMN.O) and Nokia (NOK1V.HE) will ever recoup their big recent investments in navigation technology.

Google said this week it would weave technology for driving directions and road data gathering into new versions of its Android operating system for smartphones. [nN27274525].

"The new Google navigation software for Android is a serious threat to TomTom, Garmin, and Nokia's navigation devices," said Pablo Perez-Fernandez, analyst at MKM Partners, referring to Google's Android software for running mobile phones.

Nokia and TomTom have splashed more than $12 billion in total on buying digital mapping firms Navteq and Tele Atlas.

Google's newly unveiled software, which offers real-time, turn-by-turn walking or driving directions, will already be available on Motorola's (MOT.N) Droid mobile phone launching next week. [nN28293728]

It will strike three potential blows to TomTom: personal navigation device sales, Tele Atlas digital map sales and iPhone software sales. TomTom also sells software for Microsoft (MSFT.O) Windows-based mobile phones, but not in significant volume.

"Google's free Maps Navigation product could be a game changer," said Rabo Securities analyst Hans Slob.

TomTom lost a third, and Garmin a fifth, of their market value -- a combined $1.7 billion -- since Google's announcement as investors wonder whether the firms can keep their grip on a market they were instrumental in creating. [nLS458927]

The smartphone with Google navigation would be placed in a car dashboard holder -- like the other devices -- and have navigation information plus Street View images. Its success will depend on the accuracy and timeliness of giving directions.

The navigation market -- once a duopoly of Garmin and TomTom

-- has become more crowded, with the two market leaders facing -- has become more crowded, with the two market leaders facing stiff competition as the technology is adopted into devices such as Research In Motion's (RIM.TO) BlackBerry, Apple's (AAPL.O) iPhone, and similar offerings from Palm (PALM.O), Nokia and Taiwan's HTC (2498.TW).