Nokia move could lead satnav makers to dead end

RELATED NEWS Nokia`s foray into services business Nokia to offer free navigation

Nokia's move to offer free navigation on its smartphones could sound the death knell for the pureplay satellite navigation industry.

Nokia said on Thursday it would offer motorists turn-by-turn directions for 74 countries in 46 languages for free in an attempt to better battle Google, which started to offer free navigation on Motorola's Droid smartphones in the North American market in late 2009.

Nokia is entering a race with Google to get the largest installed base of mobile navigation users, trying to make life difficult for Google and other smartphone manufacturers.

The move is seen as a definite game changer and should save the Finnish company from seeing a stronger decline in its smartphone market share.

The move to offer free navigation on some 20 million smartphones is set to hurt key players in the global navigation market, including TomTom and Garmin.

It is clearly a blow to TomTom, whose shares are down 8.8 percent at 1000 GMT and which lost a third of its value in October after the Google announcement.

Analysts concluded last year after Google's foray into navigation that it was unlikely that TomTom, Garmin and Nokia would ever recoup their big recent investments in navigation technology. Nokia and TomTom have splashed more than $12 billion in total on buying digital mapping firms Navteq and Tele Atlas.

The Nokia move may cause a new flurry of acquisitions from the likes of Samsung, RIM and Microsoft as consumers will expect free turn-by-turn navigation to be a standard feature on smartphones.

TomTom has to come up quickly with a new plan as 70 percent of sales come from PNDs. PNDs could disappear in the future with the market for navigation solutions evolving into navigation standard in every car and free navigation on every mobile device.