Betting the farm
The Sat Nav market has been experiencing healthy growth for some years now, but as it matures it becomes more difficult for suppliers to differentiate themselves and thus extract margin.
To date the majority of Sat Nav devices have been standalone and single function, but this could be about to change. In July the European Commission approved the acquisition, by Nokia, of Sat Nav map supplier NAVTEQ for around $8 billion. This marked a significant investment in the GPS market by the world's biggest mobile phone handset maker.
When the move was first announced Olli-Pekka Kallasvuo, Nokia president and CEO, said: "Location based services are one of the cornerstones of Nokia's Internet services strategy. The acquisition of NAVTEQ is another step toward Nokia becoming a leading player in this space. By joining forces with NAVTEQ, we will be able to bring context and geographical information to a number of our Internet services with accelerated time to market."
One person who's delighted Nokia feels that way is David Wither, the CEO of UK GPS antenna maker Sarantel. We speak to him to find out a bit more about location based services (LBS) and where his company fits in.
"Nokia bought NAVTEQ and is betting the farm on GPS enabling location based advertising, gaming and social networking. It's anticipating a confluence of the web and GPS," says Wither.
The reason we don't already have this confluence, according to Wither, is that the hardware - specifically the GPS antenna - hasn't been able to provide a precise enough location for the phone user. "The problem for precise positioning is that our bodies absorb electromagnetic radiation and the satellite is 20,000 miles away," says Wither.
"Our design reduces the amount of energy lost from the antenna to the body, giving it a better gain pattern. Most GPS antennae have a mapping resolution of over 20 metres. Assisted GPS reduces acquisition time but doesn't solve the resolution problem."