TomTom reacts to Nokia -- formalizes offer for Tele Atlas

Just one day after Nokia offered $8 billion for NAVTEQ, TomTom is in the news with a formal offer for Tele Atlas. Of course, TomTom had already announced their intent to offer €21.25 per share (about $2.56 billion) for the map maker back in July -- the same amount tendered today. Back then the offer represented a sweet 32% premium over the average Tele Atlas share price. However, Tele Atlas is now trading above the offer price thanks to speculation caused by the Nokia deal. We say hold out for more Tele Atlas. Just hint at discussions with Nokia or Garmin and we're pretty sure TomTom will up the ante.

[Thanks, SmartDust]

[Scott Goosman @ Oct 2nd 2007 6:45AM]

Sounds like terrible news for the consumer! Will we see GPS price go up now?

[Jon @ Oct 2nd 2007 6:59AM]

No. GPS usage is free and this won't affect pricing of chips.

Maps and content however are different. I doubt the price will go up. In fact with the navigation market set to grow exponentially (something Nokia cleverly realised) I believe that prices will eventually drop as more products are released.

[Scott Goosman @ Oct 2nd 2007 7:07AM]

There are 2 major map producers, Telenet and Navteq. One is being bought by Nokia and the other TomTom. Sorry but there are more than 2 manufactures in the market and these 2 producers are working on vertical integration.

I don't see how this is good for the consumer in the long run or helpful for prices. I suspect the maps/software are the most expensive single component of a GPS unit.

[Andrew @ Oct 2nd 2007 7:58AM]

Yes, the maps probably cost a lot more than the chipset. But then again with Nokia owning the rights to the maps perhaps Nokia users will have better and cheaper maps with their phones in the future?

[amby @ Oct 2nd 2007 8:05AM]

@Andrew - the maps could get better, you are right - but they are free for some time now. You can simply download it (application and maps) from the Net. You can also load any maps on-demand from your phone, if you don't mind the data charges of the carrier.

Nokia only charges you if you want voice navigation (route planning is free) or city guides, based on the days you want to use it for. I don't think owning the maps would make that cheaper.

[3waygeek @ Oct 20th 2007 9:48AM]

In the Pocket PC/Smartphone world, you can see the cost differential quite directly. Bluetooth GPS units run around $50-$75, while mapping applications using Navteq or TeleAtlas maps run in the $150-$200 range.

Granted, those costs include things other than the GPS chipset & map licensing costs, but it's still indicative of the costs of map data.

[Ian @ Oct 2nd 2007 9:07AM]

Hmmmm
Google and Yahoo provide Maps for free. Nokia and TomTom (Telenet & Navteq) make you pay hugely for Maps.

Which business plan will fail?

[amby @ Oct 2nd 2007 9:19AM]

@Ian - Nokia provides Maps for free. Please check your facts before statements like that.

[ScOObyDoo @ Oct 2nd 2007 9:29AM]

1) Where do you think Google gets their maps? Check maps.google.com and see who the copyright belongs to.

2) Google PAYS Navteq for their maps, so even though they are free to us we pay indirectly through ad's

3) Google maps is hardly a replacement for a good in-dash or portable nav system. It does very limited GPS on some phones, no rerouting and still requires a PDA data connection and GPS or notebook. The price of this is usually higher than a standalone GPS unit.

4) Since when do Tele Atlas and Navteq make YOU pay for maps? If you buy a $200 Garmin or TomTom unit it comes with all the map you need.

[Ian @ Oct 2nd 2007 9:43AM]

o When I buy a GPS unit I get MAPS included BUT these maps are only for the Regiuon of the world I reside in. i.e. I live in NJ so I get NA maps. But I travel to Europe and Asia so I need all those maps as well. I HAVE TO PAY for them. Go to Tom Tom and other sites and see the mega prices for the downloads!

o I don't care where Google and Yahoo go for their base maps. They pay for them in some way, but increasingly they offer better maping services to the user, usually for no charge. Sure we see ads... As the internet becomes more common and faster via wireless.... I think most can see where this leads....... The point is the business of GPS is likely to morph over the next few years.....

I think this answers the queries put to me:)

[John @ Oct 3rd 2007 10:05AM]

You have to wonder where Samsung, Sony Ericsson and Motorola will get their map data. They wouldn't want to buy it from Nokia after they have bought Navteq. And it's questionable if they would want to buy it from TeleAtlas after TomTom has bought them.

The overall industry would really benefit from at least having one independent map data provider. Whether that independent map data provider is TeleAtlas or Navteq wouldn't matter much, but I think this provider would do very, very well.

If Nokia really buys Navteq and TeleAtlas shareholders rejected the TomTom offer, not only are TeleAtlas likely to still have TomTom as a customer, but they could also add Garmin, Motorola, Samsung, and Sony Ericsson as customers.

[ScOObyDoo @ Oct 2nd 2007 9:26AM]

Would people stop calling it "Telenet"? It's Tele Atlas and it's clearly spelt out in the title AND article...

[dUN @ Oct 3rd 2007 6:01PM]

One day, man one day, Google Map will rule them all !!!!

[Jon @ Nov 7th 2007 7:10AM]

Google buys their maps from Tele Atlas and Navtaq. As do Yahoo! and Microsoft.