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

Nic Roets nroets at gmail.com
Thu Feb 4 12:26:55 GMT 2010


Hello Jaak,

I think your price of E100 per user for map data is much too high. Remember
that you can buy a new WinCE based GPS with touchscreen, processor, flash
memory and maps for that kind of money and the device will last you a couple
of years.

Navteq may also (try to) segment the market: If your company distributes
their maps to a segment of the market they are not currently tapping into,
you will get the licenses for cheap. If you supply to the top end user (e.g.
iPhone app), they will charge you much more.

If you look at the Tom Tom financial statements, they have significantly
written down their TeleAtlas asset. Likewise, Nokia must be regretting their
purchase of Navteq. Intellectual property's real value can be multiples of
replacement cost (like when these mapping companies were bought), or it can
be a fraction of replacement cost.

Google certainly has been the disruptor, by building their own maps for the
US so quickly.

Regards,
Nic

On Thu, Feb 4, 2010 at 10:31 AM, Jaak Laineste (Nutiteq)
<jaak at nutiteq.com>wrote:

> 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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