Nokia buys NAVTEQ

October 03, 2007

On October 1, some news were released. One was about changes in Skype management and some followup to the eBay acquisition structure. I can’t really say that I have strong feelings about that news either way, in any case it was an evolution rather than a revolution.

Instead, on the same date, a piece of news was released that I think is much much much much more important in the grand scheme of things. Nokia buys NAVTEQ. I.e one of the mobile handset manufacturers is going to own the company that provides map data to many navigation systems in the world, including web-based, in-car and special applications.

The other big company in this space is Tele Atlas who reportedly is going to be acquired by TomTom. So now we got a pretty interesting situation where the two major companies in the map data space space are owned by hardware manufacturers. And all the Googles, Yahoos, Microsofts and whoever else is doing location-based stuff needs to contract with either Nokia or TomTom.

Typically it has been said that handset operators are victims to mobile carriers who can dictate pretty much any terms they want and manufacturers must comply by e.g crippling their devices for particular markets. But now Nokia and TomTom have suddenly become navigation powerhouses and are diversifying their businesses beyond just producing phones or GPS systems to actually owning the data and licensing it to other people and thus benefitting from the boom of location- and proximity-based services that surely continue to grow. Interesting.