Digital maps shake-up gets EU go-ahead

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The European Commission yesterday (2 July) cleared Nokia’s acquisition of US digital map maker Navteq in a move expected to reshape the growing market for satellite map databases, which are becoming a must-have gadget for cars and smartphones.

The EU’s green light will allow Nokia, the Finnish global leader in the production of mobile phones, to enter a promising duopoly market with Tele Atlas, a Dutch company.

Navigable digital map databases offer many more services on top of the simple satellite navigation systems which drivers have become accustomed to. 

While some devices already indicate hot-spots such as shops, pharmacies or restaurants, tomorrow, they will provide targeted advertisements related to some locations, an untapped market which Nokia believes has great potential.

The merged company emerging from the Nokia-Navteq operation “would be unlikely to pursue a strategy for closing off competitors,” the Commission concluded in a note released on 2 July following an in-depth investigation into the proposed merger.

Tele Atlas has itself recently been acquired by Tom Tom, a Dutch company which is the EU market leader for navigation software and portable navigation devices. After an in-depth investigation, the Commission approved that acquisition on 14 May, paving the way for Nokia’s own acquisition (EURACTIV 31/03/08).

Unless Google improves its own Maps service, Nokia and Tom Tom will therefore become the new leaders in the growing market for digital maps, with the blessing of the European Commission.

Nokia agreed to put €5.1 billion on the table to buy Navteq, making the digital map maker its most expensive acquisition and beating Tom Tom, which spent €2.9 billion on Tele Atlas. 

“Navteq will play a key role in our Internet services strategy,” said Nokia Chief Executive Olli-Pekka Kallasvuo, explaining the Finnish company’s move.

The use of digital maps is already a growing functionality in the new generation of mobile phones – the so-called smartphones – and it is easy to foresee further expansion now that Nokia is entering this market. 

The trend towards a mobile internet, thanks to wireless applications, can only increase the number of location-based services available in the near future. Once again, digital maps will be at the core of these developments, these acquisitions suggest.

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