Paradigm Shift In The Entire Navigation Industry

London, 15th Oct 2007 – CEO of Jentro Technologies comments on the impact of the Nokia/Navteq deal.

The acquisition of Navteq by Nokia will, in the opinion of industry experts, greatly accelerate the development of mobile phone navigation systems and other ‘connected navigation devices’, i.e. devices that interlink navigation with content from the Internet. "This acquisition will drive a paradigm shift in navigation. Navigation of the future is connected," says Hans-Hendrik Puvogel, CEO of Munich-based Jentro Technologies. Jentro is the latest winner of the Navteq LBS award and, according to market researcher Canalys, is Europe’s number two in mobile phone navigation after Nokia. ‘The valuable assets Nokia gains with the acquisition of Navteq are not only the maps, but also the latter’s location-based services (LBS), including traffic information from Traffic.com and travel information from Discover Cities,’ says Puvogel.

The market analyst Strategy Analytics sees the market for LBS growing from around 200 million dollars in 2006 to 1.2 billion in 2011. Puvogel believes that in future content will generally play a key role within the billion-dollar navigation market. Under the name ‘location-based experience,’ a new discipline is currently evolving, which combines local searches, maps, route navigation and dynamic information from the Internet. This development impacts on the entire industry, on both terminal equipment manufacturers and network operators alike, as well as on content providers, for whom this interconnection presents new business opportunities. The advertising industry also stands to benefit, since, due to the integration of dynamic content, navigation will become the ideal environment for mobile marketing.

Network operators under pressure
According to Puvogel, it is particularly mobile phone network operators and service providers who will have to rethink their strategies. In acquiring Navteq, Nokia has given a further boost to the trend towards network-independent solutions in the mobile phone industry. As a result, mobile phone providers run the risk of losing their exclusive access to customers and, as such, control and sales. Customers expect strong brands and excellent content – areas in which many network operators have struggled to deliver thus far. Puvogel believes that navigation offerings are a must for network operators and service providers, whether under their own brands or in cooperation with strong third-party brands. Strategic partnerships with content providers need to be fostered in order to support their own core business in the data sector.

Internet-enabled terminal equipment has the edge
Equipment manufacturers also need to rethink things: ‘Stand-alone navigation devices, i.e. devices without Internet access, have no future,’ predicts Puvogel and this is all to the advantage of Internet-enabled mobile phone navigation. Strategy Analytics believes that these systems will be capable very shortly of closing the ranks with PNDs (personal navigation devices) that currently dominate the market. In Western Europe alone, this market analyst predicts more than 100 million GPS-enabled mobile phones by 2011. Peter Friedland, Equity Research Analyst GPS Industry with the Soleil Group, assumes that, following this acquisition by Nokia, the other mobile phone manufacturers will redouble their efforts to develop GPS-enabled mobile phones. ‘This acquisition kindles a fire in the entire mobile phone industry. All the manufacturers will now increase their efforts to launch GPS and LBS solutions onto the market in a bid to remain competitive with Nokia,’ says Friedland.

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