[OSM-talk] Fwd: Nav4All navigation shut down by Navteq

Jaak Laineste (Nutiteq) jaak at nutiteq.com
Thu Feb 4 08:31:55 GMT 2010


2010/2/3 John Smith <deltafoxtrot256 at gmail.com>:
> Any way, back to the original post Nokia is saying Nav4All's is wrong...
>
> http://www.tietokone.fi/uutiset/nokia_kiistaa_kilpailijan_navigoinnin_tappamisen
>
> http://translate.google.com/translate?js=y&prev=_t&hl=en&ie=UTF-8&layout=1&eotf=1&u=http%3A%2F%2Fwww.tietokone.fi%2Fuutiset%2Fnokia_kiistaa_kilpailijan_navigoinnin_tappamisen&sl=fi&tl=en

The question for me is how the hell they were able to provide free
navigation in the first place? I've heard that commercial map data
providers are asking up to 100 (depending on quantity) per end-user
per year for their data licenses (for navigation purposes). So you
need to have solid business case how to cover it (with advertisments)
and a lot of money to cover the costs until you have enough revenues.
Basically there should be way to show ads to each end-user in the
average value of at least 100 EUR/year to break even. This sum cannot
be more than a fraction of profit what is earned by the ad buyers, so
considering all intermediates the total value of goods sold via the
ads should be ~100 times larger than cost of the ads, i.e. 10.000
EUR/year, as average. Can you imagine that ads just in your mobile
navigation software (what is typically used couple of times per month)
can sell any goods for 10.000 EUR/year? You download first free (and
really not so user-friendly) navigation app, and then every time you
use it you also see some ads, and based on these make a purchase in
the value of 100-1000 EUR, each time. This does not sound very
probable to me.

So the ad-supported commercial navigation business model just cannot
work. I'm expecting that also Locationet's free Amaze will also shut
down, or switches to  to OSM or turns out to be mostly paid
application. The data is so expensive, that for Nokia it was cheaper
to buy whole Navteq to get it, and even for Google it was more
reasonable to collect own database before they could meet their target
price (zero).

Of course Nav4all was not paying 100 EUR/year to Navteq for the 27
million end-users, they had to be negotiated significantly better
deal, I guess next to zero. Navteq, due to demands from Nokia, or
maybe even without it, was not interested to continue it this way. And
it was definitely unfair for other their customers who had to pay the
full price.

This is my speculation.

Jaak




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