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   Technology StocksNVT - Source of GPS Software, Data, and Maps

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From: tech10110/12/2007 9:50:40 PM
   of 211
GPS Leader Garmin May Be Headed In Cell Phone Direction

Friday October 12, 7:00 pm ET

Patrick Seitz, Investor's Business Daily

In a list of the great tech rivalries, it might be time to add Nokia vs. Garmin.

No. 1 cell phone maker Nokia (NYSE:NOK - News) raised eyebrows this month when it announced a big acquisition that encroaches on Garmin's navigation device business. But Garmin (NasdaqGS:GRMN - News), the leader in navigation, or GPS, devices, might respond in kind. It's said to be mulling a move into the cell phone business.

"Garmin knows it could build one hell of a fantastic wireless handset," said Jeff Evanson, an analyst with Dougherty & Co.

Based on talks he has had with Garmin employees, Evanson says he believes the company will come out with a GPS-enabled mobile phone next year.

Several other analysts also see that possibility, though it's uncertain just how deeply Garmin might dive into the cutthroat mobile phone business.

"There's a case to be made (at Garmin) for an evolution toward a smart phone," said Richard Valera, an analyst with Needham & Co.

Garmin already is adding more wireless capabilities to its auto and portable navigation devices so they can receive real-time traffic, gas price, weather and other data.

But Valera says Garmin isn't likely to make a frontal assault on the mainstream cell phone market. Instead, he sees it going after a niche market for people who want a handset with a heavy navigation focus.

This wouldn't be a first for Garmin. It introduced NavTalk, the world's first GPS-equipped cell phone, in 1999. The product was sold mostly in Europe, but was discontinued a few years later.

Garmin spokeswoman Jessica Myers says the company hasn't announced any plans to make a new cell phone.

"We announce 70 products a year so there are a lot of concepts and ideas that we look at, however that's not in the immediate plans," she said. "I can't say we're never ever going to do it. I mean, we've already done it."

A Confident Company

Garmin already is active in the mobile phone space, making GPS applications for other companies' cell phones, she points out.

But the cell phone industry and Garmin have changed a lot since 1999's NavTalk, Evanson says.

"Garmin now believes there's no one in the world that they can't go head-to-head with in developing consumer electronics," Evanson said. "That confidence in their engineering and design capability is an important mental shift at the company that's happened in the last couple of years. Now, all consumer electronics categories are in play."

Yair Reiner, an analyst with CIBC World Markets, also believes Garmin might well come out with a cell phone. "But the handset business isn't an easy one to get into," he said. "Even Apple is finding that out."

Speculation on Garmin's re-entry into the mobile phone business comes at an uneasy time for the Olathe, Kan.-based company.

Nokia announced Oct. 1 a deal to buy digital mapmaker Navteq (NYSE:NVT - News). Garmin gets almost all of its digital maps from Navteq. Meanwhile, rival GPS device maker TomTom is buying the other major digital mapmaker, Tele Atlas. Navteq and Tele Atlas have a duopoly in the digital map business.

While Nokia and TomTom insist they'll run the digital map firms as independent units, the deals would put Garmin in the position of having to get maps from its rivals.

Garmin has worked closely with Navteq. It's shared sensitive information such as product road maps and production volumes with its map supplier, Reiner says.

Garmin could see its profits squeezed as prices for digital maps stabilize or perhaps rise, American Technology Research analyst Rob Sanderson said in a research note. Map prices have declined at double-digit rates for the past few years, but if these two acquisitions go through, map prices are likely to hold steady or rise, he says.

Garmin gets about 70% of its sales from auto and portable navigation devices. The portable devices attach to windshields or dashboards and display digital maps and points of interest. They give directions to drivers using data from GPS, or global positioning system, satellites.

Market penetration is still low for such devices in the U.S. But with aggressive price cuts, more consumers are expected to pick up the handy tools.

A typical portable navigation device, or PND, could sell for 50% less this holiday season than a year ago, Evanson says, putting many products in the $200-$300 range.

Targets Many Markets

Garmin should have a good holiday season so long as sales volume makes up for lower prices, says Jonathan Braatz, an analyst with Kansas City Capital Associates.

Garmin differs from rivals, including TomTom and Cobra Electronics (NasdaqGM:COBR - News), in that it has a diversified business centered on navigation products. Besides its devices for cars, Garmin makes navigation products for the aviation, marine, outdoor and fitness markets. Those products range from high-end airplane avionics gear to armband gadgets for long-distance runners.

This year, Garmin expects overall sales to exceed $2.8 billion, up 58% over last year. It sees earnings per share of more than $3.15, a 34% jump.

Garmin focuses on delivering high-quality wares that are easy to use and offer a lot of utility for consumers, says Garmin Chief Financial Officer Kevin Rauckman.

The company, he says, expects to spend more than $150 million this year on R&D. Garmin has almost 300 patents issued and another 200 pending applications.

For the last few years, Garmin also has worked to raise its brand profile through advertising. It expects to spend about $175 million on ads this year, Rauckman says.

Garmin has made six acquisitions in the last two years and has three pending. It has bought exclusive distributors in France and Germany and has deals pending to buy distributors in Spain, Italy and Denmark.

Garmin is the No. 1 GPS products maker in the U.S., but trails Amsterdam-based TomTom in Europe. Garmin hopes buying its major European distributors will help it to better compete against TomTom.

Besides buying distributors, Garmin has purchased several small tech companies. They include Nautamatic Marine Systems, a maker of boat autopilot systems, and Digital Cyclone, a provider of real-time weather data to mobile devices. It also bought Dynastream, a maker of personal monitoring technology, such as heart-rate monitors for sports and fitness products.

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From: tech10110/28/2007 6:03:48 PM
   of 211

October 24, 2007, 5:07 pm

Google Analyst Day: CEO Eric Schmidt

Posted by Eric Savitz

The last speaker at the Google (GOOG) analyst meeting today is CEO Eric Schmidt.

Schmidt says it has become clear we are at the beginning of a massive transition to cloud computing. A global transition from one form of information sharing to another, of one form of computing to another. We can now actually see an integrated strategy for the company.

Schmidt says the strategy is search, ads, apps. Search is not a solved problem. We have no way of capturing your expert insights immediately back into search. How could we take the knowledge from the enormous number of people who use Google every day and put it into search. Makes sense for us to get higher quality content; the kind of insightful thing we are seeing all over the Web, thinking of Wikipedia and other examples.

In a company where search is the view we have of the world, he says, easy to say everything is a search problem. People with Google Docs, just leave everything there and just search. Can’t do it with any other system. Same with Gmail. People leave all there email, and leave it there. Whether desktop or enterprise or global search, or specialized content search, problem of search is powerful, fundamental and not completely solved.

On advertising: There is a different model that has been successful for us, that ads have valuable in and of themselves. Use information we glean to provide extremely targeted ads. Everything we know tells us that model should work in every market; we believe value to end user is in a targeted ad. You say, you don’t want any ads at all, he says, but actually you do.

Principle of targeting is the underlying principle, and we are not done with that by far.

In applications side, here is the story of Calendar. They were exciting about 500 years ago. Wrong. Turns out, calendars are a simple metaphor. You compare them with friends, families. Fundamental, the first example of why the new paradigm is fundamentally different than what we grew up. Makes it viral, powerful.

Google Docs: trying to solve different problem from market leader. (Wouldn’t want to mention MSFT Office specifically, would he?) Most people I know would fundamentally prefer to throw out infrastructure and use our enterprise product. Actually possible for small business to outsource everything to GOOG for $50 a year. Looks like it can get pretty big. Very significant organizations trying it. Users want sharing, accessibility.

We’re just at the beginning, he says. A coherent strategy that solves real problems that end users have. We used to just talk about it. We have customers, teams, products; web service paradigm makes the world a quicker game. Sum of all that is instead of static release cycle, it is experience that is constantly changing. Sets up tremendous innovation.

Schmidt (suit, tie) is now asking Sergey Brin (wearing a white t-shirt, black sweats and Crocs) and George Reyes (suit, no tie) to join him on stage for a Q&A session. They are sitting on tall bar stools. Brin is in the middle; he looks like a guy in custody, sitting between his two lawyers.

Q: On Google maps, are costs higher with Nokia/Nateq and TomTom/TeleAtlas deals?

Brin: Neither deal closed, but it is pretty small component to what our maps to. And we have other vendors for road data. We have satellite, street level, 3D model data. Our geographic products encompass a whole range of things.

Q: On Google apps, can you reach 5%-7% in small/medium sized business segment? Is adoption coming at expenses of Office? What attach rate for premium subscription? Challenges in accelerating adoption?

Schmidt: Very dangerous for us to predict penetration rate. Many companies still not Internet savvy. We have best tools for them to publish and advertising their products. Really about penetration rate of Internet as a whole. We know our presence in market has affected pricing, but not about market share. We’re moving very quickly; people have to learn about it, and convert way their infrastructure works.


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To: tech101 who wrote (192)11/3/2007 4:02:23 PM
From: tech101
   of 211
Mapping the Road to Riches

By Jay Palmer

Word Count: 555 | Companies Featured in This Article:

Garmin, TomTom, Navteq , Nokia, Sony

I'LL ADMIT IT: I'M OLD ENOUGH TO RECALL that the very first satellite-based personal navigation devices told you your location using only latitude and longitude. That may have helped seasoned mariners, but not those of us trying to find the best route to the mall. Luckily, today's navigation devices come loaded with detailed maps. Some even show you where you are via Google Earth-type satellite photos.

All of which explains why the two biggest makers of the devices, Kansas-based Garmin (ticker: GRMN, market value $22 billion) and its Dutch rival TomTom (TOM2, market value $6.05 billion), are facing off in ...

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From: tech10111/5/2007 2:26:49 PM
   of 211
["Navigation is turning out to be the breakout data application wireless carriers have been looking for. A recent study by Nielsen Mobile, a San Francisco research firm, found that 13 million U.S. consumers have downloaded a navigation application to their phones. Moreover, of the $118 million in revenue generated from downloaded wireless applications, more than half came from navigation and location-based services."]

Garmin and TomTom Vie for TeleAtlas

The two navigation-device makers are duking it out for ownership of the digital mapmaker. The loser risks being dependent on competitors

by Arik Hesseldahl

Digital maps are all the rage. Or so it seems from the surge in demand for suppliers of digital maps to navigation-device makers. Navteq (NVT) is being snapped up for about $8.1 billion by Finnish wireless-phone giant Nokia (NOK). And now TeleAtlas, a Dutch supplier of mapping data, is the object of a bidding war between Netherlands-based TomTom and Garmin (GRMN), which is headquartered in Olathe, Kan.

Three months after TomTom bid $2.8 billion for TeleAtlas, Garmin uncorked a surprise $3.3 billion offer on Oct. 31 that bests TomTom's by 15%. The following day, TeleAtlas gave TomTom five days to sweeten its offer.

An Intense Rivalry
Both suitors have a clear interest in landing TeleAtlas, one of only two digital map providers. Now that Navteq has gone to Nokia, whichever company loses TeleAtlas will rely on a rival for its mapping data. Garmin currently gets about 98% of its mapping data from NavTeq. "The world has changed over the last 90 days, and we didn't like the direction it was going," Garmin Chief Financial Officer Kevin Rauckman says of the period since TomTom's offer. "It could have potentially ended up being a difficult and awkward situation."

Awkward is putting it mildly. Garmin, with an expected $3 billion in sales this year, is the top U.S. maker of the personal navigation devices that motorists are scooping up in increasing numbers. But TomTom sells more units outside the U.S. And the competition between them has been white hot since TomTom attacked the U.S. market in 2006 (, 8/28/06), landing shelf space with big retailers Best Buy (BBY) and Circuit City Stores (CC) and advertising aggressively on TV. Girding for attack on TomTom's home turf, Garmin has acquired distributors in Germany, Denmark, Italy, and Spain and has boosted marketing efforts, including buying advertising time during the Super Bowl. The two also have knocked heads over patents in the U.S. and European courts.

Now the two companies have a new rival in Nokia, which has sold more than 300 million mobile phones in the first three quarters of 2007 and intends to make navigation a feature on practically all of its phones in the coming years. Navigation-ready wireless phones already are starting to show signs of eating into the retail market for personal navigation devices, or PNDs (, 9/14/07). Garmin, which focuses on automotive, marine, and recreational navigation devices, has sold 6.78 million units in that period. TomTom, which sells only automotive PNDs, has sold 5.3 million.

A Bidding War in the Offing

With the clock ticking on the TeleAtlas ultimatum, the bidding is likely to go higher. Executives with TeleAtlas had no further comment and TomTom executives did not return calls seeking comment. Rauckman suggests he's ready to go the distance: "We're pretty committed to our strategy of acquiring this company."

Analysts say Garmin has the needed firepower. "Garmin probably has more financial wherewithal to bid higher," says analyst Jonathan Braatz of Kansas City Capital.

How high? A serious response from TomTom would have to sweeten the pot by at least 10%, suggesting the price tag could go to $3.6 billion. So a second Garmin bid could easily reach $4 billion.

"They can both go higher, and they can both afford it," says David Niederman of Pacific Crest Securities in Portland, Ore.

Some investors aren't so sure. Garmin's stock has dropped 17%, to $100.01, in the two days since it made the offer public.

Competing with Nav-Ready Phones
Should Garmin win, it will likely use the acquisition to build a raft of new products. Rauckman says, "We have a vision for much-improved mapping data. We want to make it even better with 3D mapping as that becomes available." Rauckman also suggests Garmin plans to compete with Nokia and other cell-phone makers on the wireless front. "As the market becomes more mobile, we'd like to add pedestrian-friendly content into the mapping and add some local searching capabilities."

The takeover craze in navigation data suppliers is likely to reach beyond map-data providers. Companies such as TeleNav and Networks In Motion, both relatively small, could become the next takeover targets. Both supply wireless carriers including Sprint (S), Verizon Wireless, T-Mobile (DT), and AT&T (T) with subscription-based navigation services that work with several wireless phones. Research firm iSuppli estimates that by 2011 some 440 million wireless handsets, or nearly one-third of those used worldwide, will be navigation-ready, representing a quadrupling of the number of nav-ready handsets in use in 2006.

And navigation is turning out to be the breakout data application wireless carriers have been looking for. A recent study by Nielsen Mobile, a San Francisco research firm, found that 13 million U.S. consumers have downloaded a navigation application to their phones. Moreover, of the $118 million in revenue generated from downloaded wireless applications, more than half came from navigation and location-based services.

The upshot for PND makers like Garmin and TomTom is that they have to embrace the ever-more-sophisticated wireless phone or risk a slowdown in sales of dedicated navigation devices. "They're going to have to adapt, either by making their own phones or owning the companies that supply the wireless carriers," says Sam Altman, CEO of Loopt, a Mountain View (Calif.) company that sells location-based software to wireless carriers. "Once you get good navigation on a device like an iPhone, do you really need a PND in your car?"

Hesseldahl is a reporter for .

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From: tech10111/5/2007 2:59:06 PM
   of 211
Navteq Doesn't Belong to a Gear Maker

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To: tech101 who wrote (195)11/6/2007 11:39:11 AM
From: tech101
   of 211
Why Microsoft Should Enter the GPS Space

Dean Reese, November 05, 2007

The GPS device and GPS content space needs consolidation to survive. You have device makers Timble (TRMB), Garmin (GRMN) and Tom Tom and you have content providers Navteq (NVT) and Tele Atlas (TLATF.PK). As more handheld devices utilize GPS, the opportunities for device makers shrink while content becomes more of a commodity. In the end, some of these companies have to be absorbed to survive.

The events of the past month seem more like musical chairs than calculated strategic decision making. eBay's (EBAY) Skype quickly comes to mind.

Nokia (NOK) does not need Navteq – As I wrote before, this is a marriage headed for divorce. Nokia is the market leader. They need to stick to expanding their global market share.
Garmin does not need to be a cell phone maker – As I wrote before, this is not a core competency.
Garmin does not need Tele Atlas – Tele Atlas is the market leader, but why buy content when it is fast becoming a commodity?
Who can step up, bring the pieces together and build the next generation? Microsoft (MSFT). Garmin and competitor Trimble need a suitor and Microsoft would be a great fit for either company.

Why is Microsoft a good fit?

Microsoft wants and needs to expand their lines of business
Microsoft has the Microsoft Mobile Smartphone
Microsoft has a GIS/Mapping platform with the Virtual Earth and MapPoint products
Garmin’s software can run on the Microsoft Mobile Smartphone platform
Trimble already runs on the Microsoft Mobile Smartphone platform
Microsoft is hitting on all cylinders and the time is right. Does this seem too simple and logical? Yes.

Disclosure: Author holds a position in MSFT

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From: tech10111/7/2007 12:08:20 PM
   of 211
Is it fair for the money-losing Tele Atlas to receive a bid of $4.2 billion while NVT with 50%+ more revenue and being highly profitable only got $8.1B?

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To: tech101 who wrote (196)11/7/2007 2:16:37 PM
From: jmiller099
   of 211
I strongly disagree with the author that Navteq's business is headed towards commodity. It isn't a business that can crop up overnight with minimal funding like a Web2.0.

Whoever wants to enter navigation services will have to license from Nokia or Tom Tom, if they set it up that way. Alternatively, if they're big or assume they will be big, they may save on licensing costs by taking a huge upfront hit in costs and time in generating the data themselves.

The only other way I could see is Google setting up a consortium of open source types to each individually contribute, aggregate the data, and ensure a strict wiki-like environment to try and control data integrity.

I strongly wish NOK didn't buy NVT.

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To: jmiller099 who wrote (198)11/20/2007 4:29:05 PM
From: tech101
   of 211
Do we believe that our government will allow for the only two digital map companies to be owned by foreign nations with America left for nothing?

We launched the satellites, we have GPS gears, but we will be left without software and data?

Will that happen? I don't believe.

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To: jmiller099 who wrote (198)11/20/2007 4:30:19 PM
From: tech101
   of 211
The Paperless Map Is the Killer App


NOVEMBER 26, 2007, BusinessWeek

Forget media downloads. Cell customers really want GPS and navigation features

First, cell phones made the streetcorner pay phone obsolete. Now they're doing away with the need to ask for directions. A surge in phones with built-in satellite navigation capability has sparked a wave of creative mapping and locating services. And it has set off a multibillion-dollar scramble by companies to buy up digital navigation technologies.

The number of navigation-ready cell phones will hit 162 million this year, or more than seven times the number of such devices sold for use in cars or other nonphone gadgets, says researcher iSuppli. You only have to scan phone company ads to see how they are touting navigational features: The new N95 smartphone from Nokia (NOK ) plays music and videos, but it also has a chip that receives signals from the government's Global Positioning System satellites, enabling the phone to display maps. Research In Motion (RIMM ) is already putting navigation features into its BlackBerry smartphones. Other big phonemakers including Motorola (MOT ) and Samsung are doing the same. Apple (AAPL ), having put a version of Google (GOOG ) Maps on its iPhone, is widely expected to add GPS chips and live mapping in 2008.

Phone carriers and software developers alike have been quick to offer location-based services that go way beyond simple street directions. Verizon's (VZ ) Chaperone service allows parents to track the location of kids from their phones or on the Web and sends a message when they reach their destination. Loopt lets Sprint (S ) and Boost Mobile customers track friends--imagine a buddy list overlaid on a map--and sends alerts when they're nearby. Services like those rang up $92 million in sales in the third quarter, or 58% of what consumers spent to download software to phones, Nielsen Mobile found. This spring, wireless users spent on average nearly twice as much on navigation as they did to download music to their phones, says David Gill, a Nielsen Mobile analyst.

To understand why phone-based navigation is suddenly so hot, talk with Debby Ramundo. The senior project manager at Seattle's Swedish Medical Center, Ramundo oversees 200 doctors and nurses who visit patients who can't travel to a doctor's office. Like millions of other people, clinicians are hard-pressed to get to the right place on time. That can be especially tricky in fast-growing Seattle, where new residential streets pop up out of nowhere. So last year the medical center handed out GPS-equipped Nextel cell phones. The phones offer such features as spoken turn-by-turn directions.

Such options until recently could be found only in $300-plus dashboard devices. The software, from TeleNav, a Sunnyvale (Calif.) company, costs each user $10 a month. But Ramundo says efficiency gains for medical workers more than offset the added costs: "Every hour they're not here in the office getting directions or getting lost is a billable hour they're out seeing patients."

For years, satellite-based navigation technology was restricted to the military, which used it to position troops or guide missiles. The government purposely made GPS signals too fuzzy for civilians other than hikers or boaters to find useful. That changed in 2000, though, when civilians were given access to more accurate signals. An industry quickly sprang up for car-based navigation, which is a $6.8 billion business today, says iSuppli.

Now GPS phones are embedded with tiny chips that receive signals from the collection of 31 GPS satellites that blanket every inch of the Earth with a faint radio signal. A receiver needs to be within range of at least four satellites at once to determine its location accurately. That is drawn on-screen, matching latitude and longitude with maps sent via wireless Net connections.

As more players jump into navigation, it has triggered a wave of deal-making that reflects the nervousness of established players. Makers of car-based or other dedicated (nonphone) devices worry that competitors will gain control of essential mapping data, which show names and locations of streets, homes, restaurants, and hotels and must be regularly updated.

The two companies supplying that data, Chicago-based Navteq (NVT ) and Netherlands-based Tele Atlas, are now being rolled up. In July, one of the largest car-navigation outfits, Dutch concern TomTom, moved to acquire Tele Atlas for $2.3 billion. Stock in rival Navteq soared on the expectation it would be acquired by Garmin (GRMN ), TomTom's Olathe (Kan.)-based competitor, or perhaps Google or Microsoft (MSFT ), which operate mapping sites. But on Oct. 1 phone giant Nokia jumped in with an $8.1 billion deal to buy Navteq--a price nearly 14 times its $582 million in 2006 sales.

Faced with having to buy mapping data from a competitor, Garmin announced on Oct. 31 a hostile $3.3 billion bid for Tele Atlas. TomTom responded with a $4.3 billion offer. Garmin has until Dec. 4 to counter. The buyout binge isn't likely to end there. Analysts say possible targets include TeleNav, which supplies navigation software to carriers, and its rival Networks In Motion of Aliso Viejo, Calif. Also in the spotlight is Kirkland (Wash.)-based Inrix, spun off from Microsoft in 2004. It supplies live traffic data on 55,000 miles of U.S. roads. Its sole competitor,, was bought earlier this year by Navteq, and is becoming part of Nokia.

For navigation outfits that see Nokia as a competitor, that raised the possibility of losing access to traffic data as well as mapping data. So they're furiously signing agreements with Inrix, says President and CEO Bryan Mistele: "The last 120 days have been the best days in our company's history."

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