Monday, October 1. 2007

Nokia Deal Having Impact on Garmin

Though markets aren't perfect, the news of Nokia acquiring NAVTEQ has had an immediate impact on Garmin (GRMN) in which investors appear to be suggesting that it missed an opportunity. At mid-day, the stock is down over 10% and TheStreet.com thinks that GRMN will pay more for the street data and finds itself left out of a market where their competitor, TomTom now has sole possession of one side of the duopoly, Tele Atlas. TheStreet.com thinks the big issue is the new market for pedestrian navigation, which Nokia itself made very clear in its conference call this morning. I think that may be a red herring and the bigger play is for in-vehicle systems at least that's where the margins will be higher. In fact, I see the issue for Nokia is that they see an opportunity to control more of the communication electronics for in-vehicle systems starting with navigation and continuing to cellular and Wi-Fi - based applications. Regarless, Nokia is shining a spotlight on LBS applications as a strategic part of its business.

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Joe,

The more that organisations try to lock down access to data, the greater the oportunity for open data projects such as OpenStreetMaps. Such projects are gaining increasing support daily.

Bruce

#1 Bruce Bannerman on 2007-10-02 01:09 (Reply)

Interesting what will happen in the market. For sure projects such as OpenStreetMaps will gain value. However, OpenStreetMaps has only value when there is enough data to build applications on top. From that perspective the donation of maps from the Dutch mapping company AND is very interesting.

If I were Garmin, but also Google and Microsoft I would be a bit worried what would happen to the pricing of the data. Mapping companies being controlled (by Nokia/TomTom) may no longer lower their prices. As a consequence, prices of PNDs may no longer drop as before, but will it than still be able to become a mass market product??

#2 Scott on 2007-10-02 02:36 (Reply)

Why should they worry, Scott? You have to recognize that there are plenty of us smaller guys out there just waiting for the pricing challenge...

#2.1 Daniel (Link) on 2007-10-02 12:15 (Reply)

Because I believe prices might just go up by Navteq and Tele Atlas. This way restricting all those nice location based services being created at the moment based on Google Maps and Microsoft Maps.

#2.1.1 Scott on 2007-10-02 16:55 (Reply)

Garmin fell more than $7 on Tuesday, dropping it to $100.10, their lowest closing price since late August in heavy trading. That's a drop of 17% since the Nokia announcement. Still, "Garmin shares are up almost 80 percent for the year and 112.5 percent for the past 12 months."

Kansas City Star
http://www.kansascity.com/business/technology/story/300605.html

#3 Adena Schutzberg (Link) on 2007-10-03 07:15 (Reply)

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In reply to	[ Top level ]#1: Bruce Bannerman on 2007-10-02 01:09 #2: Scott on 2007-10-02 02:36   #2.1: Daniel on 2007-10-02 12:15     #2.1.1: Scott on 2007-10-02 16:55 #3: Adena Schutzberg on 2007-10-03 07:15
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