Navteq has 1,000 analysts who drive around in vehicles outfitted with computers, microphones and high-resolution video cameras, gathering...
CHICAGO — Navteq has 1,000 analysts who drive around in vehicles outfitted with computers, microphones and high-resolution video cameras, gathering digital information on everything from landmarks to bridge heights to street closings. Now the Chicago company wants to recruit an additional billion data collectors: cellphone users.
Digital mapmaker Navteq is preparing for a significant leap from portable GPS devices and automobile navigation systems to the cellphone, and it is joining with the world’s largest handset manufacturer, Nokia, to do it.
Navteq Chief Executive Judson Green sees the mobile phone as the key to expanding both Navteq’s geographic reach and the breadth of information it can provide.
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“We’re excited about tapping into the Nokia community of consumers — of which there are close to a billion around the world — who can give us input as to what they find when they’re traveling,” Green said.
Nokia commands about 40 percent of the global market for cellphones, and it has a strong presence in emerging markets such as India and China, where Navteq is eager to invest.
In October the Finnish handset maker announced a deal to acquire Navteq for $8.1 billion. The Chicago company would continue as a wholly owned subsidiary, keeping its local headquarters and Green as CEO.
The European Commission, which opened an inquiry into the Nokia-Navteq deal in March, is expected to approve the transaction by its Aug. 8 deadline. Once the acquisition is complete Navteq can push more aggressively into developing countries where the cellphone “is the central piece of technology,” Green said.
“Ultimately, you will find maps on every phone and you’ll find location-based content on every phone,” he said
A cellphone could also be a live probe, Green said, noting that real-time data about how quickly a handset is moving could provide clues as to the speed of traffic in an area.
Deal must be approved
Analysts expect the European Commission to clear the acquisition because in May it approved Dutch GPS device-maker TomTom’s $4.3 billion acquisition of TeleAtlas, Navteq’s only other rival.
Green said he wants to get into so-called dynamic content such as data on gas prices and parking. Navteq has made a major push into traffic information, including opening a new center at its headquarters in late 2007. The traffic studio serves local broadcasters.
But as Navteq looks at creating other kinds of location-based content it will come up against niche competitors that are already developing cellphone software related to geography.
These programs, which can be subscription-based or subsidized by advertising, provide services such as localized directory searches, restaurant recommendations and pedestrian navigation help.
Navteq will “have to be a bit creative when it comes to how they grow their business model,” said Michelle Warren, an analyst at Info-Tech Research Group.
“They might look at acquiring some of the smaller companies or partnering with them, because what Navteq can do is bring their brand name to the table and bring partnerships with all the device manufacturers,” she said. “They’ve been very strategic in how they’ve built up those partnerships.”
Analysts say more mobile-phone users are starting to use location-based services on their handsets. Research firm Gartner forecasts that the global number of subscribers to these services will total 43.2 million in 2008 and hit almost 300 million in 2011.
Revenue from these services, which include anything from mapping stores to pinpointing the real-time location of friends, is expected to exceed $8 billion in 2011.
“I don’t see us in the future getting involved in content that might be Wall Street quotes or sports scores or things which are not really location-based,” Green said. “But if location is a factor, then we’re going to be involved in it for sure.”
Green, 55, joined Navteq in 2000 when the digital mapmaker was owned by Philips Electronics, and he took the firm public in 2004.
When asked if he was planning to stay, Green praised the firm and its prospects.
“We have a very exciting future and we’ve got a great team and we’re continuing to grow, so these are really exciting drivers for me.”