The two largest manufacturers of navigation devices (Garmin and TomTom) have seen profits (and stock prices) drop even as they sell more units. Garmin (based in the Cayman Islands) has the reputation of providing high-end and high-quality products while TomTom (Dutch-based) supplied the more price conscious buyer. In fact both companies provide very good products and their respective application software appear very similar. One major difference is the digital map supplier that the different companies use. Garmin licenses their digital maps from Navteq, and TomTom uses Tele Atlas.

Navteq and Tele Atlas are the major digital map suppliers. Neither company produces a GPS device, but instead licenses their maps to GPS manufacturers. Navteq is based in the USA, and Tele Atlas is a Dutch company. Navteq has the better reputation for mapping in the Americas (Canada, USA, and South America) while Tele Atlas is regarded as the better map maker for Europe and Asia.

The market will see a significant change. The Navigation Devices Manufactures (navigation, information and communication devices) are bidding on the digital map companies (Navteq and Tele Atlas). The idea is to gain more control of the maps, provide more revenue from licensing fees, produce a better device, and trump the competition.

Nokia (based in Finland) is entering the market placing an 8.1 billion euro bid for Navteq. Yikes! That precipitated a bid for Tele Atlas by TomTom for 2 billion euro, followed by a 2.3 billion euro bid from Garmin for Tele Atlas.

What this means to consumers

You can expect the acquisitions will happen, but it will be awhile. TomTom’s bid for Tele Atlas is a natural since both companies are in the Netherlands, but Dutch authorities are examining this and have not given the approval. Garmin’s higher bid for Tele Atlas only adds to the dilemma. Nokia’s bid at 8 billion for Navteq is very high; most likely Google and Microsoft are the only companies easily able to match this (and they may decide to do just that).

And… It will very difficult for new or small companies to enter this arena if a company which produces devices (navigation, information and communication) also controls the digital mapping data base. If these acquisitions happen, you can expect to see some existing companies that do only mapping and routing will disappear.

--Spike

 

Garmin just signed a deal to use Navteq through the year 2015.

 

^^ This is very good news.

Navteq is clearly a better map database for North America. And, Garmin consistently produces better application software for GPS devices. Since Kenwood uses Garmin’s application software and GPS devices, I would recommend either of these (Garmin or Kenwood) as the best GPS selection for users in the Americas.

I wonder if Garmin will continue pursuing its bid for Tele Atlas? I would think so.

--Spike

 

Thats great news.... I love my portable garmin for work

 

Yep and they gave up on their bidding war w/TomTom for TeleAtlas.

 

Your going to see alot of the larger manufacturers of electronics bail from the portable nav market (Pioneer for instance). While they will still make in dash units I believe the AVIC-S2 will be the last portable unit they produce. Way too many players in the market now..

 

Yes... Reported in the WSJ Weekend Edition. Garmin decided to go with a long term agreement with Navteq with a renew option. The TomTom buyout of Tele Atlas isn't a "done deal."

--Spike