The Duopoly Divides – TomTom to Buy Tele Atlas
I should have started my day on European time. TomTom and Tele Atlas issued joint press today announcing the sale of TeleAtlas to TomTom for around $2.5 Billion. Scratch previous suggestions that perhaps the two were growing apart. This move will not only enhance the navigation product reach while reducing TA OPEX with streamlined user-generated data collection science, but it also blocks new competitive entrants who would otherwise threaten TomTom’s future. Obvious threats include Google and Nokia. With news of the TA sale, NAVTEQ stock was up 16% today at noon EST, with investors salivating at the possible sale of the other member of the once global duopoly. So, it seems previous rumors live-up to their possibility and a race is now on between Google and Nokia for NAVTEQ, but in that race, it’s hard to imagine folks like Microsoft to sit on the sidelines and give-up their already tremendous investments …
Naturally, a number of other smaller navigation suppliers are biting their fingernails today. What happens to folks on both sides of TeleAtlas and NAVTEQ’s usage? Here’s a compressed list of smaller navigation application solutions providers and their respective database usage preference. Will they be abandoned… consumed…? It’s hard to imagine they’ll continue to receive product to support a competitive effort.
- Appello - NAVTEQ
- ALK - NAVTEQ
- Clarity Communications - NAVTEQ
- Dash - Tele Atlas
- Destinator - NAVTEQ
- Garmin - NAVTEQ
- Jentro - NAVTEQ
- Networks in Motion - NAVTEQ
- Motorola - NAVTEQ
- Nokia/Gate5 – Tele Atlas
- Navigon - NAVTEQ
- Mio – Tele Atlas
- Navitime - NAVTEQ
- Route 66 - NAVTEQ
- TelMap - NAVTEQ
- TeleNav – Tele Atlas
- WaveMarket – Tele Atlas
- WayFinder – NAVTEQ
- Webraska – NAVTEQ
Also, I wonder about the major developer ecosystem efforts of both Tele Atlas and NAVTEQ going forward. Why engage a developer community that builds competitive end-user product? Perhaps outreach strategies will shift towards engaging other content publishers and media companies vs. developers who build function. This will be interesting to watch…
Jonathan Spinney
The folks at Navx captured an interesting TomTom-TA M&A take discussed at the Canalys Navigation Forum 2007 a couple weeks back in Spain.
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Reader Comments (1)
That said, from a strategic perspective this makes sense for Tom Tom as a quasi-diversification move. PND market growth is expected to slow as carrier navigation offerings gain traction and In-Vehicle system price points drop. The map data market on the other hand will (in our opinion) continue to grow robustly for the foreseeable future; one way of viewing map data providers is that they are the arms suppliers to all sides in the navigation war. The strategic case for Tele Atlas is less clear. Sure they got a nice premium, and it may well be that Tom Tom's asserted technology benefits will have a positive impact on TA's business, but they could have licensed that technology. Agreeing to be acquired by one out of dozens of competitors in the navigation space, and in one of the most vulnerable sub-sectors to boot, is more than a bit confusing to put it politely.