It was extremely stupid for Garmin to bid in the first place. They will get badly hurt whether they raise the bid (balance sheet in the toilet) or pass(credible possibility of service interruption - no one will play nice on $1.66 billion sabotage). TomTom ain't dumb. They'll make sure that extra tab yields some serious market share. If you're an investor of Garmin, get packing. Navteq/Nokia will be the accidental winner.
If I understand the market well, there are two suppliers of mapping data. Nokia has one, and the other is up for grabs now, with a bidding war going on. If I were Garmin, I would be pretty nervous about relying on a competitor to continue supplying the data required to drive a significant portion of my devices. In fact, given Garmin's acquisitions over the years, I am surprised they waited this long to attempt to acquire a technology so core to their business.
On the other hand, Garmin might have something up their sleeve, and it just bidding to boost the price, and make Tom Tom pay an additional premium.
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It was extremely stupid for Garmin to bid in the first place. They will get badly hurt whether they raise the bid (balance sheet in the toilet) or pass(credible possibility of service interruption - no one will play nice on $1.66 billion sabotage). TomTom ain't dumb. They'll make sure that extra tab yields some serious market share. If you're an investor of Garmin, get packing. Navteq/Nokia will be the accidental winner.
If I understand the market well, there are two suppliers of mapping data. Nokia has one, and the other is up for grabs now, with a bidding war going on. If I were Garmin, I would be pretty nervous about relying on a competitor to continue supplying the data required to drive a significant portion of my devices. In fact, given Garmin's acquisitions over the years, I am surprised they waited this long to attempt to acquire a technology so core to their business.
On the other hand, Garmin might have something up their sleeve, and it just bidding to boost the price, and make Tom Tom pay an additional premium.