Nokia HERE Posts €233m in Revenue, Down 18% in 2Q 2013

Nokia last week announced their financial revenue for the second quarter of 2013. Nokia group net sales were 5.7 Billion, down 24 percent against the same quarter last year. Its map and location-based services division HERE posted a revenue of €233 million, down 18 percent year-on-year.

HERE external sales were €195 million, up 8 percent. Commenting this figure Nokia explained that: “In the second quarter 2013, the year-on-year increase in external HERE net sales were primarily due to higher sales to vehicle customers as well as non-recurrence of a negative sales adjustment made in the year ago quarter related to historical license fees in the normal course of business for a particular customer.“

Internal sales were €38 million, down 63% year-on-year from €103 million. “The year-on-year and sequential declines in internal HERE net sales were due to declines in sales, including lower recognition of deferred revenue, primarily related to our Smart Devices business unit,“ wrote Nokia.

It is interesting to see that HERE external business is now representing 84% of its revenue against only 63% in the same quarter last year. While we do not have precise figures on that, it is highly possible that Nokia is no more the biggest customer of HERE. Garmin? BMW? Others?

It definitely validates our long time analysis that – apart Google – no single player (i.e. Nokia, TomTom) has enough power to turn map data ownership into a competitive advantage. The cost of worldwide map maintenance and improvements is too high to be fully endorsed by a single organization.

With this new HERE branding, the NAVTEQ and Nokia Maps assets are probably on the right track for a spin-off that would release some value for Nokia’s shareholder’s.

Google Settles WiFi War Driving Privacy Case for $7m in the U.S.

Connecticut Attorney General George Jepsen yesterday announced a $7 million multistate settlement with Google over its unauthorized collection of data from unsecured wireless networks in the United States through Google’s Street View vehicles.

“While the $7 million is significant, the importance of this agreement goes beyond financial terms. Consumers have a reasonable expectation of privacy. This agreement recognizes those rights and ensures that Google will not use similar tactics in the future to collect personal information without permission from unsuspecting consumers,” Attorney General Jepsen said.

 

According to the press release of the Connecticut Attorney General, “The agreement also requires Google to: engage in a comprehensive employee education program about the privacy or confidentiality of user data; to sponsor a nationwide public service campaign to help educate consumers about securing their wireless networks and protecting personal information; and to continue to secure, and eventually destroy, the data collected and stored by its Street View vehicles nationwide between 2008 and March 2010.“

Other similar cases against Google are still pending in many countries, especially in Europe.

Download the full text of the agreement here.

Euclid Raised $17.3M for Retail Analytics in Series B Round

Euclid:euclidanalytics.com/, a Palo Alto start-up company that specializes in real-world shopper analytics for retail has secured a Series B round of funding led by Benchmark Capital with participation from NEA, Harrison Metal, and Novel TMT Ventures.

This rounds adds to the $5.8 million Series A which was led by New Enterprise Associates with Harrison Metal, Triple Point Capital and other investors.

The company has also announced the addition of Bruce Dunlevie, general partner at Benchmark Capital, to its board of directors.

Measuring more than 50 million mobile devices

The company said it now measures more than 50 million mobile devices. Euclid has customers in specialty apparel, department store, auto parts, and home improvement categories.

The start-up is using Wi-Fi signals on consumer smartphones to map shopper traffic patterns in retail spaces and aggregate this data to provide actionable information to store marketers. The system provides metrics such as the percentage of people that enter the store compared to walkbys, the visit duration, the visit frequency, etc.

The system can be self-installed using plug and play adhoc Wi-Fi sensors or rely on the existing infrastructure of Wi-Fi network vendors such as Aerohive Networks, Aruba Networks, Fortinet and Xirrus.

TomTom Revenue Down 17% in 2012, Outlook for 2013 is Challenging

TomTom today posted their financial earnings for the fourth quarter and full year 2012 that show a quarterly revenue decline of 19% (to €289 million) and an annual decline of 17% (to €1,057).

Consumer business

During the fourth quarter 2012 TomTom consumer revenue declined 23 percent to €183 million. “The year-on-year decrease is mainly the result of PND (Personal Navigation Device) demand continuing to be less skewed towards the fourth quarter.“

TomTom indicated that the PND market size in Europe was 2.5 million units compared to 3.2 million units in the same quarter of last year. TomTom’s European market share increased from 47% in Q4 2011 to 50% in Q4 2012.

The North American market size was 2.5 million units compared to 3.7 million units last year. TomTom market share in North America declined to 19 percent compared to 27 percent in the prior year.

For 2013 TomTom expects the PND market “to decline by 15—20% in volume year over year.“

TomTom also added that the sale of their sport watch developed jointly with Nike is doing well: “we saw revenue from the SportWatch nearly double year on year albeit from a small base.“

Automotive

TomTom’s automotive revenue declined 21 percent to €44 million. “The year on year decline reflects the tough conditions in the European automotive industry which continue to constrain new car sales,“ wrote TomTom.

With automotive clients such as Renault and Fiat, TomTom is facing the consequences of the difficult situation of these car manufacturers hurt by the weak European demand for their cars.

Licensing

Licensing generated revenue of €37 million in this quarter, a decline of 7% compared to the €40 million in Q4 2011, “mainly due to lower revenue coming from third party PND vendors. “

Sequentially, revenue increased by €4 million or 12 percent (Q3 2012: €33 million), “as a result of higher revenue from smartphone and internet customers.“

Business Solutions

Business Solutions is the only business unit in growth with €20 million revenue in the quarter, up 8 percent year on year (Q4 2011: €19 million) and up 6 percent sequentially (Q3 2012: €19 million).

The WEBFLEET subscriber base in the quarter grew by 33% year on year to 239,000 (Q4 2011: 180,000). The customer base passed the 19,000 mark, what TomTom believes to be “the largest in the fleet management services industry.“

“Our partnership with Tracker is developing well and sales in South Africa grew markedly,“ added TomTom.

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Poynt Assets Acquired by Canadian Companies

Two Canadian companies: Intertainment Media Inc. and Avenza Holding Inc. have acquired the assets of Poynt, the bankrupt local search company for an undisclosed amount. Avenza is a company that specializes in GIS, mapping and cartography software while Intertainment is a technology incubator.

Poynt filed for bankrupcy in July 2012. The company was listed on the Toronto stock exchange and had raised $15.5 million in April 2011.

While Poynt enjoyed a great success in terms of app downloads and usage (more than 15 million users) of its local search product its financial situation was a complete disaster. In the first quarter of 2012 its revenue was $590,000 while its operating loss was $5.8 million, including 2.1 milllion spent in salaries and consulting fees and $1 million in advertising and marketing.

The ambitions of the company (who started a joint venture in China and partnred with Times media group in India) were completely out of proportion in comparison to the limited revenue offered by its local search app.

"We are very excited to have the opportunity to acquire the Poynt platform and its assets and continue to move forward with its leadership position in the global localization arena in partnership with Avenza’s worldwide expertise in mapping and location services," said Anthony Pearlman, President and COO of Intertainment Media who has been appointed by the partners as CEO of the new enterprise.

eCall Mandate Pushed Forward by EU Parliament

All new cars must be fitted by 2015 with eCall devices said Members of the European Parliament in a resolution adopted jointly by the Internal Market and Transport Committees on Tuesday.

The resolution, adopted by 58 votes to 4, with 8 abstentions, regrets the delays in the voluntary deployment of eCall to date and the small proportion of cars fitted with it (only 0.4% according to their calculations) and urges the Commission to table legislation to make the eCall system mandatory by 2015.

The non-legislative resolution will be voted in plenary session of the Parliament in Strasbourg in July 2012. The Commission is expected to table a legislative proposal on eCall by the end of 2012.

The adoption of eCall in Europe will encourage new developments in telematics with all new cars fitted with GPS and wireless modules.

TomTom Buys out JV Partner in Thailand

TomTom today announced to have increased its stake in its Thailand joint venture from 80% to 100%. This buy-out gives TomTom full control of its map operations in this emerging market. The joint venture will be renamed TomTom (Thailand) Co. Ltd. 

“Thailand is a key market for us in APAC. It is seen as the automotive centre of South-East Asia, which makes this a logical next step in consolidating our strong local presence in the APAC region,” said Maarten van Gool, Managing Director TomTom Licensing.

The acquisition of this minority shareholder marks the third in a row this quarter, after TomTom acquired 100% ownership of its Indian and Indonesian map operations.

ESCORT Debuts Lawsuit against Cobra

Last week U.S. radar detector vendor ESCORT started a new lawsuit against its competitor Cobra Electronics.

ESCORT has filed a complaint against Cobra Electronics in Federal Court for patent infringement of two ESCORT patents. ESCORT’s lawsuit asserts infringement by Cobra’s iRadar product and announced iRadar community service.

"The patents asserted in this lawsuit recognize ESCORT’s innovations marrying GPS and radar detection, which are the result of development and research by ESCORT engineers extending back well into the 1990’s," said John Larson, CEO and President of ESCORT. "Our inventions and patents cover not only the identification and marking of false alerts, but also, the sharing of radar alert information between detectors, an idea we brought to the market with the ESCORT Live(TM) social network. ESCORT and Cobra have peacefully coexisted since 2008, but with the iRadar, Cobra has overstepped its bounds, into infringement of our patents.“

Meridian Raised $1m for Venue-Centric Mobile Apps

Meridian, a start-up company based in Portland, Oregon yesterday announced to have closed a $1 million round of seed funding to develop its mobile software offering for large venues that encompasses indoor maps and location-based services.

The round was led by Oregon Angel Fund and Bellingham Angels Group.

The software developed by Meridian provides venues with a customizable interface that reflect its branding, a search API and an indoor navigation system. Meridian customers include a bookstore, a couple of museums and a stadium.

Meridian said that many locations with millions of visitors per year have already signed on to start using their solution: chain retailers, large hospitals, pro-sports stadiums, casino/hotel conglomerates, real estate companies, convention centers, museums, parks, and Fortune 500 corporate campuses.

Meridian has also established a close relationship with Cisco. The networking giant turned to them to build the first “indoor GPS” app for the American Museum of Natural History that was launched in July 2010.

3Q 2011: Garmin Reports Sales Down 4% But Increases 2011 Guidance

Garmin yesterday has offered us a paradoxal third quarter financial earnings with a revenue down 4 percent ($667 million) and operating income down 12 percent ($147 million) against the same quarter last year; however its executive team is forecasting an increased financial outlook for the full year.

Full year revenue is now expected to reach $2.6 Billion and pro forma EPS $2.3 to $2.4 against $2 to $2.15 previously expected.

Free cash flow was $174 million in third quarter 2011.

Auto/Mobile segment

The automotive/mobile segment posted a 13% revenue decline in the third quarter, nevertheless “ahead of our expectations“, said Garmin CEO Min Kao. Revenue in this segment was $384 million including $25 million from NAVIGON (representing 2 months of activity as a Garmin subsidiary).

Garmin indicated that the PND market contracted 20% in the US and approximately 10% across EMEA markets in the quarter. Interestingly, these market estimates differ from TomTom’s which saw 12 % decrease in Europe and 28 percent in the U.S.

Garmin said it maintained a U.S market share of more than 60 percent and in the mid 30% range in the five largest markets in Western Europe. Market share gains in Europe are mostly due to the NAVIGON acquisition representing an additional 13% units sales in EMEA.

The average selling price (ASP) in the quarter was relatively stable due to an increase in bundled product offerings (maps, traffic), offset by a decrease in the ASP of comparable models from the prior year.

The reported operating margin for the segment was 15% driven by product mix and the updated deferred revenue model associated with certain bundled products. When adjusted for net deferred revenue and costs associated with bundled products, operating margin would have been 18%.

Outdoor segment

The outdoor segment posted revenue growth of 5% ($95 million) including contributions from the recent acquisition of Tri‐Tronics. “This was slightly below expectation as growth in the quarter was restrained due to the limited availability of new products,“ said Garmin.

Fitness segment

The fitness segment posted revenue growth of 29% ($69 million)with strong results generated by the Forerunner 610 and the Edge 800.

“While we have seen an increasing number of competitors in the fitness market, we have maintained our top position in the GPS‐enabled fitness category by offering a range of products from entry‐level with basic functionality like “how far and how fast” to the high‐end Forerunner 910 for the triathlete market,“ stated Garmin in its press release.

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