Nokia’s (NYSE: NOK) recent purchase of Navteq is more than just grabbing a navigation service, according to comments on the companies recent conference call. Anssi Vanjoki, Nokia’s EVP multimedia, said: “Maps and location based services is a key service area we are focusing on. In fact, I see, that location and context information is a key component in our future internet services, including search and navigation, photos and videos, as well as presence and communities. Our vision is that the location information helps build the next base of the bed with context sensitive services.” Vanjoki spoke about making pedestrian navigation a value added service for consumers, claiming that the “pedestrian location-based services market is totally undeveloped with basically zero penetration among the 3 billion mobile devices uses globally”. This includes: finding friends, where your map on the device will show you in realtime where your friends, family and other acquaintances are, allowing you to stay in touch; creating your own location tags to add information to a map; and organise photos, video and other media according to location. Vanjoki said this was the justification for buying Navteq rather than just partnering with it: “These type of features and services you can only create efficiently if you have the map data and consumer application parts in the same company.”
Nokia is looking to generate some extra revenue from those services. In response to a question Judson Green from Navteq said: “A map is not a simple thing, as we have seen over time and as I’m sure we’ll see in the next few years there will be more and more content that we add to our underlying map, both static content and dynamic content, which does give us the opportunity to price seperately for that from the underlying map.”
That’s not to say that Nokia won’t be pushing its Maps service, which is apparently in the top five applications used on the N95 (after messaging, camera and web browsing but ahead of music). Nokia claims that 100 percent of N95 owners have used the maps application (which is a big call, I’m sure there’s at least one or two that haven’t) and that the average usage for the service is three times per week. Nokia has already announced it plans to integrate Nokia Maps into its Ovi service, which itself is a larger push by Nokia to enter the content and services industry and avoid being sidelined as a handset manufacturer. I’m hoping to see some innovative and useful stuff coming out of this deal in the next few years, although it should be noted that Nokia probably isn’t expecting to get $8.1 billion in value for its mobile services — a lot of the value in Navteq is in its stand-alone business, and it is by keeping that going that Nokia justifies the sale price.