Nokia spends $8 Billion on Navteq, promises Excellent Location-Based Services
The Finnish mobile phone giant company, NOKIA, with nearly a third of the global handset market, has decided to bet big on location-based services (LBS), and has moves on buying off the Chicago-based digital map company NAVTEQ for the going price of $8.1 billion. A break up would give about $78 per share. This is one of Nokia’s largest purchases in recent history, the worldclass mobile giant has a mixed track record when it comes to acquisitions.
This is also the second megabillion dollar buyout in the maps (LBS) space. As it can also be recalled that, earlier this year, the based Dutch GPS device maker, TomTom bought Tele-Atlas for about $3 billion.
Nokia is paying 32 times EBITDA while TomTom paid around 27 times EBITDA. Since the deal for Tele Atlas hasn’t closed, TomTom might have to pay a little more to be in the game. The deal may not favour some of NAVTEQ customer, but it is again too early to pre-empty the plans Nokia put on paper. Nokia also has to its credits the release of Nokia 330, a GPS-based navigation device which has the European market as its target, and so could find itself competing with other companies like Garmin.
But One thing is certain: the company wants to diversify its reliance on the handset business and move into software and services, where its brand positioning can really help, this can be seen in its ability to it acquire gate5 last year, a small German startup, for an undisclosed amount to media. Nokia also has a deal with Sunnyvale, Calif.-based Trimble.
"Location-based services are one of the cornerstones of Nokia’s Internet services strategy," said Olli-Pekka Kallasvuo, Nokia’s president and CEO. "By joining forces with NAVTEQ, we will be able to bring context and geographical information to a number of our Internet services with accelerated time to market."
Maps on Mobile is apparently something people want. In a recent chat, Google (GOOG) vice president Marissa Mayer told us that Google Maps usage soared after the introduction of the iPhone.
This is also the second megabillion dollar buyout in the maps (LBS) space. As it can also be recalled that, earlier this year, the based Dutch GPS device maker, TomTom bought Tele-Atlas for about $3 billion.
Nokia is paying 32 times EBITDA while TomTom paid around 27 times EBITDA. Since the deal for Tele Atlas hasn’t closed, TomTom might have to pay a little more to be in the game. The deal may not favour some of NAVTEQ customer, but it is again too early to pre-empty the plans Nokia put on paper. Nokia also has to its credits the release of Nokia 330, a GPS-based navigation device which has the European market as its target, and so could find itself competing with other companies like Garmin.
But One thing is certain: the company wants to diversify its reliance on the handset business and move into software and services, where its brand positioning can really help, this can be seen in its ability to it acquire gate5 last year, a small German startup, for an undisclosed amount to media. Nokia also has a deal with Sunnyvale, Calif.-based Trimble.
"Location-based services are one of the cornerstones of Nokia’s Internet services strategy," said Olli-Pekka Kallasvuo, Nokia’s president and CEO. "By joining forces with NAVTEQ, we will be able to bring context and geographical information to a number of our Internet services with accelerated time to market."
Maps on Mobile is apparently something people want. In a recent chat, Google (GOOG) vice president Marissa Mayer told us that Google Maps usage soared after the introduction of the iPhone.
posted by Solomon at 9:38 AM
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