Nokia (NYSE: NOK) may have spent €8 billion ($11.2 billion) acquiring Navteq in 2007, but today the handset maker announced it’s making its GPS navigation features available for free to all users.
Turn-by-turn navigation and traffic updates had respectively cost around €1.59 ($2) and €0.69 ($0.97) a day. But now the service will come pre-loaded on selected Nokia smartphones; those who already own devices can download the app.
The free service will help keep Nokia’s handsets, by way of services, more competitive with the rest of the smartphone market. It puts Nokia in competition on a services level against the likes of Google (NSDQ: GOOG), which offers a free navigation service for Android devices, and Apple (NSDQ: AAPL), whose store boasts dozens of mapping apps, such as Tom Tom’s own app.
But to be clear, this remains at heart a device play: “This will help Nokia to boost our smartphone sales,” said Anssi Vanjoki, executive VP for Nokia, at the press event today in London.
Tom Tom, one of the most dominant GPS players whose iPhone application is one of the most popular in the App Store, saw its share price dip by 11 percent in early trading today in the wake of the Nokia announcement.
—So how will Nokia make money? That’s the big question. Nokia is hoping to use its Ovi services suite, of which Maps is a part, to drive handset sales. But it also sees potential revenue in third-party services developed on top of Maps – APIs were also opened up for this today, and Maps already offers location features for Facebook, Lonely Planet, Time Out etc. There are no advertisements on Maps today, but multimedia EVP Anssi Vanjoki says this may be a future income generator. Aside from leveraging Ovi to make its phones more attractive, Nokia hopes to make €2 billion ($2.8 billion) in direct services revenue by 2011.
—Will it work?: Remains to be seen, but Nokia may be on to something: stats released today from Essential Research indicate real-time traffic updates was the biggest driver to mobile internet adoption, among those who currently do not use it. It also found that social media was the biggest driver to mobile internet usage, so pre-integrating Facebook with the mapping service from the start could have also been a good move on Nokia’s part.
—What about other devices?: Vanjoki told me, on the sidelines of the event, that Nokia is “absolutely not” interested in developing the service for non-Nokia platforms. No question then of whether Nokia is really considering hiving off its handset division, something Vanjoki himself seemed to suggest in an interview last year: “That idea is absolute bull,” Vanjoki told me.
More from the announcement…
The service is available on 10 smartphones as of today, and Nokia says it will extend this to more devices in the coming months, including its Maemo-based devices.
At launch, the service will have turn-by-turn voice guidance for 74 countries in 46 languages, as well as traffic information for over 10 countries. There are detailed maps for over 180 countries. The turn-by-turn navigation can be set for both pedestrian and car journeys, although if you’re taking a journey that involves both, you will need to programme two different searches. A Nokia spokesperson said this might be a feature that will be more seamless in future.
Nokia reports its results next week.
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