TomTom is a relative young company that showed spectacular growth in the previous years in sales of navigation tools. TomTom is market leader in navigation software closely followed by Garmin. In that area however there are continuous changes. One of them is focused in this article; the digital maps which form the basic of the navigation software.
The company recently acquired the second largest digital map provider in the world: Teleatlas. Teleatlas is owner of a large geographical database than it continuously updated and enhanced with "points of interest."
"We believe that the navigation industry is at the dawn of a new era. In the future, we are confident that end user community input and feedback about maps and POIs, including updates and corrections, will prove to be instrumental in maintaining the quality and integrity of the map at the highest level possible." Alain De Taeye, ex CEO and co-founder of Teleatlas, now member of the board of TomTom.
The Combination of a map maker and a software provider offers possibilities. Of one the synergies is the Map-Share ® concept that TomTom has elaborated. TomTom has a large user group - a community to the modern sense - which continuously send updates of locations that are changed or being altered. This is one of the main organizing efforts Teleatlas must make: a continuous update and quality control of their maps.
As maps are their main asset it is also one of the risk areas addressed by Teleatlas. In-accurate data may lead to claims as the number of services for which maps are used increase.
Linked to this risk is the risk of the role of information technology as an important element in the business process (of teleatlas). The database is the center of the operation and makes it both powerful, as vulnerable; "inadequate information may hurt the company's reputation." Now that the company has merged with Tomtom this risk will remain. Yet TomTom has established a vertical integration and may extend its business with this database. Another mentioned (1) risk is intellectual property of the digital maps. "Piracy," is added as a risk factor
Before the takeover, 56% of Teleatlas' revenue comes from only five customers. The combination of TomTom and TeleAtlas must offer new services which is already on the implementation agenda. Demands for location based services (LBS) increase rapidly.
Teleatlas has addressed four main business areas. Portable navigation - for TomTom, navman, garmin, etc. Internet mapping - viamichelin, Google maps (for mobile), Mappy
Wireless and LBS - wayfinder, RIM Automotive navigation - Blaupunkt, VW, BMW, MB Siemens VDO (now continental) and Enterprise & Government - UPS, Fedex Deutsche Post, AT&T, etc.
Nokia was one of the clients, but that must have changed since Nokia took a similar move since TomTom's takeover of Teleatlas.
After the bid issued by TomTom, Nokia decided to buy Teleatlas' main rival and worlds leading map maker Navteq.
For one side this is a new treat to TomTom; Nokia will have much more financial power to invest in new innovations and developments. They also have bought Navteq for 8,1 billion dollars and may face an equal challenge to finance this. On the other hand, it shows that TomTom has done the right thing in acquiring Teleatlas. Management demonstrated to have a vision, where their new rival has merely practiced a "me-too" step. TomTom also has an advantage in the community platform. Communities change to business models of many companies these days.
H.J.B.
(1) - Teleatlas Annual report 2007
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© Hans Bool
Article Source: http://EzineArticles.com/?expert=Hans_Bool
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