Nokia enters car navigation market
HELSINKI/AMSTERDAM – Nokia on Monday became the latest major consumer electronics company to enter the booming car-navigation market, upping the ante for Dutch market leader TomTom.
The Finnish company, the world’s biggest maker of mobile phones, unveiled its Nokia 330 Auto Navigation device with preinstalled Europe-wide map data from Dutch navigation firm Route 66.
The product will use digital maps from U.S.-based NAVTEQ, and not from its main Dutch rival, Tele Atlas, whose maps are used in a new Nokia N95 phone which doubles as a navigation device.
Tele Atlas shares fell after the Nokia news, down 2.2 percent at 12.86 euros at 1035 GMT following the announcement. The company earlier on Monday reported record third-quarter revenue and core profit.
The Nokia 330, which also plays music and displays photos and videos but does not function as a phone, is expected to be available in Europe during the fourth quarter of 2006, retailing for 360 euros ($456) excluding taxes.
It competes directly with the higher-end GO devices from TomTom which retail for between 599 and 699 euros, including taxes.
TomTom’s cheaper ONE devices, which sell for 299 to 399 euros, do not offer multimedia services such as music. TomTom, which said last week it sold 1.2 million car navigation devices in the July to September quarter, has more than half of the European car navigation market, which is the world’s biggest.
TomTom shares slipped 0.3 percent and shrugged off the Nokia announcement, although analysts said it added pressure after other large electronics firms like Sony, Samsung and LG have entered the market.
“TomTom won’t need to worry for 2007 (sales and profits), but Nokia entering the market does pose a real threat. Nokia will now offer navigation on cellphones as well as standalone devices. It has clearly defined it as an opportunity and will gain a lot of experience,” said analyst Cornelis Bos at ING.
TomTom executives have told Reuters they are not duly concerned about major electronics brands entering the market as long as they offer basically the same product.
Nokia shares were down 0.9 percent, virtually in line with the Eurotech index which slipped 0.85 percent.
Nokia recently acquired its own navigation software company, Gate 5, but chose to work with the more established Route 66 which has sold navigation software for advanced mobile phones for many years. The two have sold packages of GPS location modules, software and Nokia phones for the last two years.
TomTom expects that total sales from all car navigation devices makers will be 8 million units in Europe this year, up from 3.8 million units in 2005. U.S. consumers will buy 2 million units in 2006, up from 800,000 in 2005.