Archive for October 12th, 2007

On Nokia’s Navteq Deal

Published by Babar Bhatti on October 12, 2007 under Entrepreneurship, Gadgets, ICT, Mobile Applications, Mobile Web, Web 2.0

Simeon Simeonov analyses Nokia’s acquisition of Navteq:

Mapping is the killer mobile app. Whether you have location-based services (LBS) or not, the chances are that you are using mobile mapping software on your smartphone and starting to take it for granted that it will just be there for you when you need it. So it is no surprise that there has been some interesting M&A activity in this space.

Navteq and TeleAtlas are the top providers of street-level information, which is the key to enabling mapping and navigation applications. These are businesses where the barriers to entry are quite high–getting the initial set of street-level data requires a ton of data crunching & surveying. From that perspective, the two companies’ core value proposition is well-protected.

With the two big street mapping players now part of larger and even slower-moving companies, there may be an opportunity to disrupt this market in the next five years. The key question is one of bootstrap costs to get to a critical mass of good-enough data. I expect the solution will include three aspects:

  • User-generated content. See OpenStreetMap, for example.
  • New Location Mashing Technologies (LMTs–I’m inventing a new term here because I don’t know what to call these). I see these coming in two forms: (1) from the world of unstructured information to the world of latitudes and longitudes, e.g., MetaCarta, and (2) between more traditional geolocation databases, which some in notoriously many different formats.
  • Business models that use Navteq and TeleAtlas data (perhaps via their consumer rendition of Google Maps, etc.) as a crutch to fall back to when the data isn’t good enough.