Vodafone’s Wayfinder Purchase Maps Out a Future For Mobile Applications
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Don’t count the carriers out just yet. Vodafone’s offer to purchase Swedish navigational software firm Wayfinder shows that operators aren’t going to be turfed out of the race anytime soon to offer consumers mobile internet services in which mapping and navigation are playing an increasingly important role. Vodafone’s $30 million offer for the Swedish company that began as an Ericsson (NSDQ: ERIC) development project in 1989 means that it too will be able to offer location-based services, as the company’s internet services director Pieter Knook said today. While Wayfinder has been focusing on navigation, its technology platform is generic enough that other LBS services, such as advertising, can be built on it.
Both Google (NSDQ: GOOG) and Nokia (NYSE: NOK) have placed mapping and navigation at the center or their mobile web services strategy. In October, Google released a Maps application built especially for the G1, integrating maps with email, IM, and the web on Android. Two weeks ago at its Nokia World event in Barcelona, the Finnish handset giant unveiled its improved navigation services based on its $8.1 billion acquisition of mapping firm Navteq, promising to “coordinate the world,” rather than just map it. One of Nokia’s new services for its upcoming N97 flagship device will allow users to update their social networks automatically and mark the location of pictures of videos, for what it has coined as “so-lo” or “social location.”
What’s especially interesting, is the deal signals a possible return to the operator building its own mobile applications, when the trend has been to outsource their development. Not only does this show how important Vodafone (NYSE: VOD) values LBS as a strategic advantage, but the pressure that the likes of Nokia and Google, with their own mobile internet aspirations, have placed on it. IDC European Research Director John Delaney believes this is the first instance of an operator buying a navigation software firm. “They’ve certainly put pressure on operators to use whatever assets they have to compete, and to identify and exploit their competitive advantage,” he notes.
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But operators still have one major advantage, says Delaney, and that is the ability to track their users in real time, meaning they alone can build services based on this valuable data. “It means they could offer better functionality in their LBS offerings,” he says.
One existing example is Vodafone’s partnership with navigation device maker TomTom, which launched a traffic monitoring service in the Netherlands and rolled out in Portugal earlier this month. “High Definition Traffic” uses anonymously collected and processed traffic data generated by the real-time movement patterns of mobile phones in cars from Vodafone’s network and combines it with traffic reports and anonymous data collected from TomTom to build an overall picture of how traffic is flowing. The system improves on the traditional method of traffic monitoring that typically relies on a network of cameras and traffic detectors, which tends to give a slower and less complete picture.
Indeed, the deal could see more operators casting about for navigational software firms, though Delaney notes he is unaware of any plans. As voice revenues continue to decline, and operators turn to data to shore up the losses and to boost revenues, they will find it increasingly necessary to include a navigational component if their services are to stay relevant. As for the LBS space, Delaney notes that it’s a “crowded one,” that’s “ripe for consolidation.”
Posted In: Money, M&A & Venture Capital, Mergers & Acquisitions, Technologies / Formats, GPS Navigation & Maps, Companies, Google, Nokia, Vodafone, wayfinder
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