the environment has become more challenging for Nokia and navigation services,” said FIM analyst Michael Schroder. “Looking at what has happened in the last 12 months. In 2008, at the peak of the market, Nokia bought digital mapping firm Navteq - a rival to navigation specialist TomTom’s Tele Atlas unit - for $8.1 billion. It will take time to develop all the new revenue streams - years,” he said.īut one analyst said the move, when looked at alongside the moves of Google, could mean Nokia is readying to write down Navteq goodwill in its fourth-quarter report on Jan. “The only way to do that short-term is through extra hardware sales and a higher average sales price. “The big question is - can Nokia generate revenue enough to compensate for the revenue streams they kill,” said John Strand, chief executive of Danish telecoms consultancy Strand Consult. Turn-by-turn navigation has been one of the key revenue sources for Nokia’s services offering, and the company had said it expected one-third of its targeted 2 billion euros ($2.84 billion) services revenue next year to come from navigation. If Nokia floods the market with cheap mapping smartphones next winter, it might undermine Android vendors effectively,” said MKM’s Kuittinen. “Android vendors have been too slow in addressing the low-end smartphone market. Google started in late 2009 to offer free navigation on Motorola’s Droid model smartphones in the North American market. “It will serve as a defence to our product prices.”

“It will help us to sell smartphones,” Anssi Vanjoki, head of marketing at Nokia, told Reuters in an interview. Going forward profit margins have to come down,” said Gartner analyst Thilo Koslowski who predicted that if others follow, they could snatch up to $5 billion of the satnav market in the near-term.Īnalysts said the move may also spark a flurry of acquisitions from the likes of Samsung 028050.KS, RIM and Microsoft MSFT.O, as consumers will expect free navigation to be a standard feature on smartphones. “It’s a major shock for the navigation industry. Garmin GRMN.O sunk, TomTom fell 11 percent by 1700 GMT, while Garmin fell 4.2 percent. Shares in satnav market leaders Dutch TomTom TOM2.AS and U.S. “I’m sure Nokia’s real enemy here is Google,” said analyst Tero Kuittinen from MKM Partners. įollowing Google’s lead, Nokia, the No 1 cellphone maker, will offer free navigation on 20 million smartphones initially. BERLIN/HELSINKI, Jan 21 (Reuters) - Nokia NOK1V.HE launched free satellite navigation on its cellphones on Thursday to boost handset sales and prices, a fresh blow for satnav makers whose $25 billion market has already been hit by Google GOOG.O.

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