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Nov
Oct
Nokia Buys Navtech
Sep
Aug
Question: What does the world's largest cellphone manufacturer have to do with a
Chicago-based map company? Answer: About $9 billion dollars. The news around the
mobile web is that Nokia bought Navtech.
The cellphone giant consumes a tasty morsel.
To the everyday industry analyst, this might seem like bizarre stupidity. Nokia mostly builds handsets that
double as doggie chew toys. Navtech manages and extends a gigantic database of maps. These two don't seem
immediately related, especially when you consider that Nokia paid 50 times what Navtech earns in a year.
Yes, Nokia's stock dropped.
New Directions
Nokia's leadership clearly believes that the future of the mobile marketplace depends on having more than
just great call quality. This is why everyone has been adding everything they can think of to phones for
the last five years---cameras, FM radios, MP3 players, personal calendars, email, games, TV service. The Next
Big Thing in cellphones will be maps, which makes good sense because a phone can triangulate with
towers to determine its precise location. I definitely prefer that over built-in dental floss dispensers.
The Consumer Loses
As anyone who uses cellphones knows, the consumer continues to lose in this market. We keep getting handsets
which have more and more features but aren't any easier to use or seem to have better call quality.
The recent Bluetooth revolution mostly lead to wireless earpieces—a technology which doesn't need a
brand-new, incredibly complex digital protocol stack. Most of the new stuff added onto phones is a classic
case of solutions looking for problems. We don't need new features; we need better thinking about existing
features.
The danger is that Nokia's acquisition of Navtech will lead them (and by way of the "us-too" nature of the
marketplace, everyone else) into investing years of development into putting map technology into mobile phones.
As anyone whose ever used a map knows, what makes it useful is that it's not the size of a postage stamp.
Maps are used by spreading them out, something a cellphone just can't do.
The Probable Outcome
The most likely possibility is that we'll see maps from companies like Navtech transformed into
audio direction services. This is already available through various GPS offerings. But of course,
you don't need to revolutionize cellphone technology to do this. You just need some system,
as technologically advanced as is necessary to be competitive, that can make phone calls.
Nokia is making a nine billion dollar blunder.
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