World News: ABI comments on Nokia-NAVTEQ deal

World News: ABI comments on Nokia-NAVTEQ deal

The announcement that Nokia would acquire Navteq for $8.1 billion sent shockwaves through the mobile operator, navigation and LBS world, says ABI.

Nokia has an expanding software and services strategy that includes location aware services, social networking, mobile content, and mobile advertising. In an era of intense competition within the handset market, Nokia is leveraging its leadership position to diversify beyond hardware and establish a strong presence in end-user markets that do not require the company to work through mobile operators as gatekeepers.

But what are the implications? How will this expansion of Nokia's navigation portfolio change – or disrupt – the markets for navigation and location-based services?

Mike Ippoliti, research director, Telematics & Automotive at ABI Research says: “The impact on the future of the PND market will be significant. Anssi Vanjoki of Nokia said he saw the PND market continuing to grow, adding that there will be a new and untapped 'pedestrian navigation' market. He is right, but the players in the PND market – indeed the very concept of what constitutes a PND – will not be the same.”

He added that Garmin, Magellan and other smaller players had better be examining their business models, and suggested the possibility that they might be snapped up by a major consumer electronics or handset maker looking to capitalise on the short-term profits.

He also questioned the impact of the Nokia-NAVTEQ deal on other navigation market players and Internet portals that use Navteq data.

According to a Red Herring report, analysts say that if the deal is approved, it will effectively create a duopoly in the mobile mapping market.

“There are no independent map suppliers left in the market,” said John Strand, CEO of Copenhagen-based Strand Consult.

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