TomTom offers $2.5 billion for map maker Tele Atlas
By Paul Miller 
posted Jul 23rd 2007 9:43AM
posted Jul 23rd 2007 9:43AM
TomTom is currently the world's largest manufacturer of car navigation devices, but doesn't seem content to settle there, and has just put a $2.5 billion bid in for Tele Atlas, which provides maps for the likes of MapQuest, Google Maps, and of course navigation devices aplenty. TomTom currently accounts for around 40 percent of Tele Atlas' business, and says the deal would allow for improved maps and new features like daily map updates and better routing. TomTom would operate Tele Atlas as an independent business unit, and keep offering maps to other manufacturers -- who might take issue with their map dollars falling right into a competitor's pocket. If everything goes as planned, the two companies should be getting hitched by the end of 2007.
Crappy Tele Atlas maps have kept me from buying a Tom Tom in the US.
They give those willing to do the research a bad feeling about Tom Tom.
FYI- Navteq supplies the maps for both Google Maps and MapQuest.
Actually, both use Tele Atlas maps. For example, if you look at Riga, Latvia, in Google Maps or Buenos Aires, Argentina, in Mapquest you will see the Tele Atlas copyright.
Wasn't Microsoft planning of buying TomTom earlier this year?
Google should buy TomTom and Tele Atlas. Then start shipping gTomToms with 700 Mhz transceivers in them...
Yeah, it clearly says Navteq at the bottom of the google maps screen. Probably a smart move for TomTom though.
To close the dispute, certain locations are covered by Navteq while others by TeleAtlas. Google Maps uses both (and a few others too, but in a much smaller extent).
Check European locations to check.
If nothing else, this certainly puts NavTeq in play for acquisition. Lots of possible suitors: Garmin, Google, Microsoft, perhaps some private equity outfit...
TomTom is currently the world's largest, gayest, and most suckiest manufacturer of car navigation devices.
I wonder if this will improve the quality of their data?
Probably good news for Navteq, if other manufacturers become leery of buying Tele Atlas products.
I wouldn't be too happy about this as a Tele Atlas share holder. TomTom is about 30% of TA's revenue, but Tele Atlas rely on competitors of TomTom for the remaining 70%. Navteq will be the main benefactor if they complete this acquisition.
Navteq would be foolish to let itself be bought by another PND company. They could become the only independent map provider in the market, as it's currently pretty much a duopoly with Tele Atlas and Navteq.
The financial metrics of the deal look bleak when considering Tele Atlas' current operating approach. But there are definitely operating efficiencies that can be realized when merged with TomTom's hardware. I did a brief post on the topic on my blog:
http://www.thegpsinsider.com/2007/07/24/tomtom-deal-spells-the-end-for-orange-tele-atlas-vans/
See full analysis here: http://www.gisuser.com/content/view/12237/.
Given the 3-yr. return TA's investors got on their $210M investment, and that this could be just the opening bid for TA they end up winning either way. For TomTom, they are buying an asset that's commoditizing with the likelihood that they will drive away all of the non-GIS revenue currently being provided by TomTom competitors like Mio. If anti-trust regulators were to approve this (50-50 chance), NAVTEQ is the biggest winner with huge pricing power. I think another suitor could emerge with broader reach such as Google/Nokia/Microsoft to push a connected solution across all LBS/navigation verticals.