Don’t you love the drama? Less than a month after Tom Tom finalized a $2.5B bid for Tele Atlas, Garmin trumps with a $3.3B offer. This puts the Tele Atlas board in a very uncomfortable position. The strategic fit with Tom Tom is much stronger - both companies are based in the Netherlands and most of Tom Tom’s devices use TA data. But the board has a fiduciary responsibility to TA shareholders and would have no choice but to accept the new offer, if the bid is indeed apples to apples. On the other side of the table, Garmin almost exclusively uses Navteq data. I’m not sure how deeply integrated the data is, but it won’t be a trivial process to change horses. And here’s the kicker - Garmin won’t make the offer official until December 4th, the same say the Tom Tom bid expires.
How’s this for a possible soap opera: Tom Tom loses Tele Atlas and switches to Navteq for licensing data. Garmin gets TA, overpays and has a nice goodwill write-off in a few years. Nokia ends up the winner, despite a mammoth $8.1B price for Navteq, since mobile LBS is the future. Meanwhile, Google launches an open source mapping program that makes all of this consolidation seem laughable in hindsight. It could happen…
Earlier this month, Sony America exec John Koller hinted at a forthcoming GPS attachment for the PSP in the States. Today, Sony’s unveiling its Go!Explore GPS package in Europe, which was developed in collaboration with Tele Atlas and NavNGo. While the price doesn’t appear to have been specified, the package will include both the GPS add-on for the PSP and a Universal Media Disc (UMD) loaded with your chosen maps. According to Sony, the system will be equally capable as a pedestrian or in-car GPS, with 3D maps, 11 unique audio languages, and plenty of POIs. Go!Explore will allow users to update their POIs on the Playstation network or via WiFi. Look for it to launch “in the New Year,” with seven different geographic versions set to be available: UK/Ireland, Iberia, France, Germany/Austria/Switzerland, Italy, Benelux, Scandinavia.
Hot on the heels of a WiMAX collaboration with Clearwire, Sprint has partnered with Google “to bring WiMAX mobile Internet customers search, interactive communications and social networking tools though a new mobile portal. The collaboration between Sprint and Google will help spur new mobility and location-assisted services as Sprint untethers Internet access for consumers, businesses and government customers.” In simple terms: a Google homepage.
Here’s the best part: “Google and Sprint will optimize the Internet experience for the digital lifestyle,” said Barry West, president, 4G Mobile Broadband for Sprint. Yeah, ’cause I love my 1s and 0s. And didn’t Google already optimize it?
Google is focusing heavily on location-based services because better targeted ads equal higher CPMs. These location-based services inevitably mean maps, and the content cost will squeeze Google’s margins as its commitment to LBS grows. I would think a Google counteroffer for Tele Atlas or an acquisition of Navteq makes sense before they head too far down this road.
I came across an interesting tidbit from an interview with Tele Atlas CEO Alain De Taeye. TomTom and Tele Atlas want to tap into the user-generated content phenomenon that’s fueling the Web 2.0 trend. The two want to create a community that provides feedback on roads, traffic and points of interest, says De Taeye.
“We are going into a new era of digital mapping,” De Taeye said in the interview. “The best map of the future will be a map that is produced by a company that has full access to a large community-based input system.” With its big installed base of users, TomTom can get feedback to enhance and correct its maps, he said. Tele Atlas executives say many users want to create map databases. “That’s a huge opportunity,” De Taeye said.
So does this mean the end to all those orange Tele Atlas vans mapping the world’s roads? Probably. Do you think TomTom and Tele Atlas will give users a discount on GPS units for creating and maintaining this valuable data? Probably not. What do you think this means for the future of map data collection?
Personal navigation device (PND) maker TomTom made an announcement this morning about plans to acquire Tele Atlas, the #2 provider of digital map data. TomTom said it would pay 21.25 euros ($29.33) per share for the Netherlands-based Tele Atlas. The offer was a 28 percent premium to Tele Atlas’ closing price on Friday. TomTom is the world’s leading PND manufacturer, with market share in Europe of just under 50 percent and around 20 percent in the United States.
Tele Atlas has deals to provide map data to TomTom, Qualcomm and Nokia, while Garmin, Google, Yahoo and AOL’s MapQuest use mostly Navteq. But the bigger companies use at least some information from both, and analysts say they have an interest in ensuring neither Navteq nor Tele Atlas becomes too dominant at geo-mapping information.
This show isn’t over yet - some analysts commented that TomTom’s offer is low and that a counteroffer could come from someone like Google. Navteq, the leading provider of map data, is considered an unlikely bidder for anti-competitive reasons. Tele Atlas management supports the deal and is talking to shareholders, but a tiny breakup fee of €20 million ($27.6M) could make them change their tune if something better comes along.
Don’t you love the drama? Less than a month after Tom Tom finalized a $2.5B bid for Tele Atlas, Garmin trumps with a $3.3B offer. This puts the Tele Atlas board in a very uncomfortable position. The strategic fit with Tom Tom is much stronger - both companies are based in the Netherlands and most of Tom Tom’s devices use TA data. But the board has a fiduciary responsibility to TA shareholders and would have no choice but to accept the new offer, if the bid is indeed apples to apples. On the other side of the table, Garmin almost exclusively uses Navteq data. I’m not sure how deeply integrated the data is, but it won’t be a trivial process to change horses. And here’s the kicker - Garmin won’t make the offer official until December 4th, the same say the Tom Tom bid expires.
How’s this for a possible soap opera: Tom Tom loses Tele Atlas and switches to Navteq for licensing data. Garmin gets TA, overpays and has a nice goodwill write-off in a few years. Nokia ends up the winner, despite a mammoth $8.1B price for Navteq, since mobile LBS is the future. Meanwhile, Google launches an open source mapping program that makes all of this consolidation seem laughable in hindsight. It could happen…
