Nokia news steering map maker south
Posted
Oct 02 2007, 11:26 AM
by
Kim Peterson
Rating:
Garmin shares continue to drop today, a day after Nokia said it was buying digital mapping company Navteq for $8.1 billion. Navteq provides the location data used by global positioning systems like Garmin's.
Today, Garmin competitor TomTom is making a formal takeover offer for digital map company Tele Atlas.
Not good for Garmin, which has made a nice business of selling GPS navigation systems. Its share price dropped 10 percent to $107.23 yesterday and is down another 6 percent today. The Nokia buy was a wake-up call to investors that Garmin has a serious threat in the cell phone. Soon, GPS navigation will be a feature in phones, eliminating the need for a standalone device like Garmin's StreetPilot series.
Analysts seemed to be looking at the more short-term effect of a Navteq buy. Will Nokia raise prices for -- or even limit access to -- Navteq's mapping data? A CIBC World Markets analyst lowered his rating on Garmin to sector perform from outperform.
"Navteq's falling in to a competitor's hands threatens Garmin's ability to negotiate pricing on maps, its costliest input," wrote the analyst, Yair Reiner.
