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BOB MOON: Why spend a measly 10 bucks on a road atlas when you can buy the whole mapping company for a little more than $8 billion?
The world’s largest maker of mobile phones, the Finnish cellular giant Nokia, is apparently navigating its way into the future. Marketplace’s Jill Barshay explains:
JILL BARSHAY: NAVTEQ keeps track of where all the roads are around the world. It licenses this information to companies that create Internet maps, GPS systems for cars or walking directions. Even atlas maker Rand McNally buys data from them.
Avi Greengart of Current Analysis says Nokia was buying this raw data for its cell phone maps. Now it wants the whole supply chain.
AVI GREENGART: It would be like McDonald’s owning the cows or the land on which the cows graze.
Nokia is the world’s largest cell phone maker. But Greengart says it’s worried about competition from Apple’s iPhone — or maybe even the rumored Google phone. By buying Navteq, Nokia hopes to gain an edge over these new rivals.
GREENGART: They want to be more than just a cell phone company. This is not limited just to mapping data. In recent months, Nokia has announced an Internet portal strategy. They’ve launched a mobile music store. They’ve bought a mobile advertising agency.
Carolina Milanesi of the Gartner Group predicts that GPS navigation will be one of the fastest-growing add-on services for cell phones.
CAROLINA MILANESI: In Europe, you definitely see an interest from consumers for services around GPS, from navigation to both car and pedestrian to traffic updates and so forth.
Nokia says it will still license Navteq’s data. Now that Nokia owns half the market, it could jack up prices. If users like Google decide not to pay, consumers could end up with fewer choices on where to go.
In New York, I’m Jill Barshay for Marketplace.
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