Nokia bets billion on LBS

John C Tanner
09 Nov 2007

The mobile industry has known for years that one of mobile's key strengths was its ability to deliver location-based services that bring a geographical context to whatever you happen to be doing on the handset at the time. Nokia believes in that vision so much that it's willing to spend billions of dollars to achieve it.

And it did just that last month, forking out $8.1 billion to acquire digital map supplier Navteq. Nokia's been on a bit of a diverse buying spree this year, scooping up everything from Web 2.0 firm Twango to mobile marketing specialist Enpocket.

But the Navteq buyout raised considerably more eyebrows, albeit partially because of the price tag.

What Nokia's getting for its money is Navteq's vast arsenal of digital mapping solutions, as well as, a web and interactive service that provides traffic information and content to consumers.

Nokia - which is already pushing location-based services with its GPS- equipped N95 handset and its Nokia Maps app - has good reason to be bullish on location. In-Stat says there will be 56 million portable navigation devices (including mobiles) in service by 2011, compared to 14 million in 2006.

But the real news could be that the portable navigation device (PND) sector is in for a rude awakening, says Mike Ippoliti, telematics and automotive research director at ABI Research.

'The players in the PND market - indeed the very concept of what constitutes a PND - will not be the same,' he says. 'Garmin, Magellan, and other smaller players had better be examining their business models.'

Ippoliti added that ABI spoke with a Wall Street analyst who asked - hopefully - 'whether Garmin has a Plan B.'

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