Mobile Navigation Market
Nokia’s acquisition of NAVTEQ wasn’t that surprising. After all, Canalys only recently predicted…
"There is likely to be more convergence between the mobile phone and navigation industries over the coming year… it is not hard to imagine a leading brand trying something similar in the navigation/phone crossover space"
However, the $8.1 Billion purchase price did surprise me. To put this into perspective NAVTEQ’s 2006 profit was only $109 million. By my calculation the purchase price is even greater than Nokia’s 2006 profits. Why might Nokia think NAVTEQ is worth so much?
A clue may come from the Canalys report on the mobile navigation device market. Currently, phones take just 6% of this market and and they are well placed to dominate this space. More importantly, the mobile navigation device market is seeing 116% year on year growth much larger than phone (or even smartphone) growth.
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