The announcement from Nokia that it will offer Ovi Maps for free looks set to dramatically reshape the satnav market and signals its intent to compete head-to-head with Google's entry into this market using the Android platform.
First to feel the effect of this announcement were the established players, TomTom and Garmin, with their share values being hit hard. TomTom dropped by 15 per cent after already plummeting in October when Google announced intentions to offer navigation on its phones.
Asked how the move could impact on these two companies, Anssi Vanjoki, Nokia's exec VP, said: "I would not like to be a shareholder."
Nokia's move is also likely to trigger M&A activity from the likes of Samsung, RIM and Microsoft given that consumers will expect free turn-by-turn navigation to be a standard feature on smartphones.
The Nokia offering, based on the company's acquisition of Navteq for US$8 billion, can be downloaded onto 10 handsets including the N97 mini, Nokia 5800 XpressMusic and Nokia E72. More Nokia smartphones are expected to be added in the coming weeks.
The service comes with turn-by-turn voice guided navigation features for both pedestrians and drivers, and is available in 74 countries in 46 different languages, with maps for over 180 countries. Maps can be preloaded onto a Nokia phone so users can set Ovi Maps to offline mode, saving battery power.
While TomTom will need to quickly revise its strategy--70 per cent of sales come from PNDs--it at least has the advantage over Garmin of owning Tele Atlas, one of only two major makers of high-quality digital maps. The company acquired Tele Atlas for €2.9 billion in 2008, though it was eventually forced to issue new shares to cope with the debt it incurred through the purchase.
Nokia's developers' Forum, which the company says already includes five million software developers, will be encouraged to develop applications to augment the contextual search functions built into Ovi Maps. Lonely Planet and the Michelin Guide will also come pre-loaded.
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