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October 31, 2007
Garmin Makes Cash Offer for Tele Atlas, Pulls Rug Out From Under TomTom
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Looks like Garmin is pulling the old switch-a-roo on TomTom. Two months after TomTom announced it's intent to acquire mapping provider Tele Atlas for $2.7 billion (and just 29 days after Nokia agreed to purchase mapping company NAVTEQ for $8.1 billion), Garmin has upped the ante and offered $3.3 billion for Tele Atlas. Garmin plans to launch the offer before December 4, 2007 (the scheduled expiry date of TomTom's offer).
This is a strategic move for Garmin that make a whole lot of sense. Tele Atlas and NAVTEQ together supply maps to just about everyone from Google to Volkswagen and enjoy near 100% market share between the two mapping providers. With Nokia snapping up NAVTEQ, and TomTom stating its intent to buy Tele Atlas, that would have left Garmin potentially out in the cold with no maps to use on its GPS products.
Garmin currently uses NAVTEQ maps on almost all it's GPS navigation products, but that will change if the Tele Atlas deal goes through. Garmin plans to migrate from NAVTEQ to Tele Atlas mapping data over the next 12-24 months. Nokia is working hard to get into the GPS game, and will likely keep the NAVTEQ maps for themselves.
If Garmin and Nokia own virtually 100% of available mapping content, that could spell serious trouble for competitors like TomTom and Magellan, not to mention online outfits like Google, Yahoo, Mapquest, and Microsoft.
