Nokia Bank Account Coordinates Added to Navteq Database
It might seem like a lot of money–$8.1 billion–to pay for a company whose reported second-quarter net income was just $40.9 million on revenue of $202.3 million. Unless you happen to be the world’s largest cellphone provider. And you believe the company in question to be the key to your success in the location-based services market.
Then, $8.1 billion (54 times current earnings!) seems reasonable. As it did to Nokia, which today agreed to acquire mapping-data provider Navteq for exactly that sum. “This is Nokia’s largest acquisition ever,” said Mats Nystrom, an analyst at SEB Enskilda Bank in Stockholm. “This is a very high valuation for the U.S. company, so yes, this is a high price to pay. But navigation is a hot area and fits well with Nokia’s strategy.”
Indeed. With sales of navigation-ready cellphones on the rise, the Navteq acquisition would seem to leave Nokia poised to take good advantage of the booming location-based services market. In more ways than one. By acquiring Navteq, not only did Nokia “get a resource to power whatever GPS wonderfulness it plans for its own phones or future devices, it also kept a valuable property out of the hands of some powerful players with mapping interests, like Google, Microsoft and Yahoo,” notes Good Morning Silicon Valley. “All three, in fact, use Navteq data in their own mapping services. Nokia is likely to look for ways to nurture and leverage these relationships, because competition remains in the form of Tele Atlas, now in the process of being bought for $2.8 billion by Dutch GPS gear-maker TomTom.”