Navigon: Exclusive Talks for Sale to Garmin?

According to German daily newspaper Financial Times Deutschland, Garmin has entered into exclusive talks to buy German navigation software supplier Navigon. The price is estimated around €50 million, wrote the newpaper according to a source involved with the deal. The sale could happen in June.

GPS Business News spoke to a Navigon spokesperson that declined to comment on the FT Deutschland article.

Navigon is currently owned at 90 percent by private equity firm General Atlantic. The firm took over the company in May 2008, (read here), increasing its stake from 25 percent to 90 percent.

In the fall of 2010 Navigon had streamlined its staff, making redundancies in its research and development team in Würzburg and Hamburg (read here). Prior to that Navigon had already outsourced some of its software development to Romania.

For Garmin this acquisition means an increased commitment to the European market, bringing on board around 370 new European associates.

More importantly it is for Garmin a way to move forward its position in the automotive industry. Besides its European PND business and global mobile navigation offering, Navigon has developed ties with German car manufacturers and signed contracts to provide its navigation solution to dashboards.

In a recent interview with GPS Business News, Jochen Katzer, product manager automotive at Navigon, told us his company is currently developing a low cost in-dash navigation solution for an undisclosed car manufacturer (read here) that will be on the market after the summer.

According to rumors heard in the last few months, mobile navigation supplier TeleNav could have also been interested in the acquisition of Navigon.

Navigon had been for sale for several years but the financial crisis and the advent of free mobile navigation solutions from Nokia and Google did not help to sell the company earlier. A €50 million price tag seems to be quite a bargain for Navigon. It is definitely indicative of the value associated with navigation software these days.

Despite the “no comment“ answer from Navigon, FT Deutschland has been known in the past for reliable information about the company. The newspaper already broke the story in 2008 when General Atlantic took over Navigon.

Privacy Concerns over iPhone Location Recording

Yesterday at the Where 2.0 conference Researchers Alasdair Allan and Pete Warden revealed a major leak of location data in all iOS 4 devices.

In doing research on data vizualisation the researchers found that Apple was automatically storing a file with all historical location data (cell-ID) of the user in every iPhone or iPad with iOS 4. This unencrypted file is also backed-up to every computer you sync your mobile device to. Therefore, whoever has access to your laptop could easily track ypur every move since Apple released iOS 4 in June 2010.

The data pulled from the iPhone of Alasdair Allan shows a average of 100 cell-ID points per day.

This discovery of the two researchers clearly shows that Apple it not taking privacy seriously, despite what it said earlier when a pair of congressmen required the company to clarify its new policy about location in the new terms and conditions of iOS 4 in June 2010 (read our story here).

At that time Apple said it collects only anonymous location data, but the problem is that when it is stored unencrypted in your laptop hard disc drive it is definitely not anonymous. Now we might expect the same US Senators – and likely many privacy watchdogs across the globe (Germany and France are likely to be the toughest) to investigate the matter.

Watch below a video interview with the two researchers:

Garmin Q4 2010: Revenue Down 21%, EPS Down 51%

Garmin today reported weak fourth quarter 2010 earnings; the collapse of the PND market (25% unit drop in North America according to TomTom) is by far the reason why Garmin posted revenue down 21 percent ($838 million) and diluted earnings per share down 51percent in the quarter.

"The automotive/mobile segment revenues declined 31% on a year-over-year basis in the fourth quarter as the PND market declined from the 2009 holiday season, ASPs continued to decline, and significant revenues from bundled lifetime map products were deferred into future periods," wrote Garmin. The company expects the PND market to decline around 10 percent worldwide in units terms in 2011.

The rest of the market segments have been however performing well: the outdoor and fitness segment revenue increased 15% to $171 million, the aviation segment revenue increased 10% to $71 million and the marine segment revenue increased 9% to $37 million during the fourth quarter.

Full year 2010

For the full year 2010 Garmin revenue was $2.69 billion, down 9% from $2.95 billion in 2009. Diluted earnings per share decreased 16% to $2.95 from $3.50 in fiscal year 2009.

Automotive/Mobile segment revenue decreased 19% to $1.67 billion, Outdoor/Fitness segment revenue increased 19% to $560 million, Aviation segment revenue increased 7% to $263 million and Marine segment revenue increased 12% to $199 million.

“While 2010 represented a year of adversity for our PND business and our handset initiative, we exit the year with a growing presence in outdoor/fitness, aviation, marine and auto OEM that give us confidence in the long-term outlook for Garmin,” said Dr. Min Kao, chairman and CEO of Garmin

2011 Outlook

The guidance given for 2011 is $2.4 to 2.5 billion in revenue and $500 to 560 million operating income. "We expect revenues to decline in 2011 as the growth in the outdoor, fitness, marine and aviation segments, as well as auto OEM opportunities, is offset by ongoing declines in the PND market," said Garmin.

In 2011 Garmin will start reporting separately outdoor and fitness segments. The company expects revenue growth of 5% in outdoor and 25% in fitness, 10% growth in marine and 5% growth in aviation. In Auto/Mobile the revenue decline is expected to be approximately 20%.

NavInfo Acquires Mapscape

Chinese digital map provider NavInfo has acquired Mapscape, an independent supplier of business-to-business services for the production of digital maps based in Eindhoven, the Netherlands. Mapscape was created in 2007 as a management buy out from Siemens VDO, slightly before the acquisition of the Siemens’ Eindhoven Research and Development center by TomTom.

Mapscape is around 50 people and provides services such as map compilation, content aggregation, product tests, product certification, and quality improvement. The company has customers throughout the LBS value chain, from raw map data suppliers and dynamic content providers to mobile or built-in navigation system manufacturers.

“Henk Eemers and Ralf Stollenwerk, the founders of Mapscape, will stay with the company and continue their roles in the organization as managing directorsâ€?, said Mapscape in a statement. Each of them owned 50% of the company.

In the same statement Mapscape said that it will continue to serve its existing customers.

Learn more about Mapscape in reading an interview with the company back in 2008

NAVTEQ Acquires 3D Urban Modelling Expert PixelActive

Digital map provider NAVTEQ today announced the acquisition of PixelActive, a 16 people company created in 2003 in Carlsbad, California and specializing in 3D urban modelling. Its flagship product, Cityscape, allows for the fast development of 3D city models. Terms of the transaction were not disclosed.

Cityscape has been utilized by NAVTEQ in the development of product offerings such as 3D Junction Objects and 3D City Models.

“The acquisition of PixelActive is aimed at expanding NAVTEQ’s ability to efficiently build products in a 3D environment,” said NAVTEQ. “Steve Rotenberg and Michael Kelley, the founders of PixelActive, will stay with the company and continue their roles in the R&D organization supporting these efforts.”

"Future developments in navigation and other location-enabled solutions will rely heavily on 3D mapping capabilities," added Cliff Fox, executive vice president, NAVTEQ Maps. "Putting this critical product architecture in place will provide a foundation for the rapid creation of 3D content and keep NAVTEQ on the forefront of the industry."

More: watch below a promotional clip demonstrating the functionalities of Cityscape:

TomTom, AutoNavi Form JV for Chinese Map

Navigation and map provider TomTom has formed a joint venture with AutoNavi Holdings Limited, a leading provider of digital map content and LBS solutions in China. The joint venture will be 51% held by AutoNavi and 49% held by TomTom.

This collaboration provides TomTom and its customers access to local digital maps and real-time traffic services in a standard TomTom format.

"We are very pleased to deepen our relationship with TomTom, which we are confident will open new opportunities for us to work with international automakers, system integrators and global handset makers in the future,” said Congwu Cheng, AutoNavi’s CEO. “Ultimately, this partnership will help us grow our in-dash business and further penetrate the mobile handset market."

Garmin Acquired Cycle Tech Start-up MetriGear

Garmin today announced the acquisition of MetriGear , a Silicon Valley start-up that developed “Vector”, a new power meter based upon measuring a cyclist’s forces applied to the pedals. Financial details of the transaction were not disclosed.

At the heart of Vector is a custom-designed system with over 60 piezoresistive strain gauges, accelerometers, and temperature sensors and an electronics architecture that processes the forces that a cyclist applies to the pedals.

“From the start, our vision has been to deliver an easy-to-own cycling power meter with unique capabilities,” said Clark Foy, CEO of MetriGear. “Garmin’s world-class engineering, wireless, manufacturing expertise and their ability to deliver an end-to-end solution from sensors to displays will be instrumental in realizing this vision. We can’t imagine a more capable partner to bring Vector to market, and we are absolutely thrilled to join the Garmin team.”

One year ago, MetriGear earned “Best of Show” accolades from multiple publications at Interbike 2009 upon the introduction of Vector. The product was initially scheduled for release in the first quarter of 2010, then postponed.

“Garmin and MetriGear are dedicated to bring the Vector power solution to market. Product availability and pricing details will be released at a later time,” wrote Garmin in a statement today.

Motorola Bought German LBS Start-up Aloqa

Motorola today announced that it has acquired Aloqa GmbH, a privately-held, VC funded developer of location-based software and technologies that are designed to enable the discovery of relevant web content by mobile smartphone users. Terms of the transaction were not disclosed.

Aloqa’s technologies and services utilize the user’s context (location, identity and social relationships) to proactively inform them of places, events, bargains and other opportunities. Aloqa’s application has a main deck which hosts customizable “channels” of location-based content (Pizza, LastFM, Eventful, Qype, Yelp, Wikipedia, etc).

Aloqa is available on various smartphone platforms and more than one million users have downloaded its software (the real use rate is unkown).

The company was created in Munich, Germany in 2007 as a spin-off of the Ludwig-Maximilian-University by Dr. Georg Treu and Johannes Martens. The service went live in November 2009.

In July 2009 Aloqa raised a first round of funding ($1.5 million) from venture capital firm Wellington Partners. Along with the funding Aloqa appointed Sanjeev Agrawal, former Global Head of Google Product Marketing and subsequently VP Products at TellMe Networks (acquired by Microsoft), as CEO (read here).

Weak Class Action Lawsuits Filed against TeleNav

This week and last week several law firms in the United States filed lawsuits – seeking class action status – against mobile navigation provider TeleNav.

According to the complaints, TeleNav allegedly failed to mention in its IPO prospectus and filing the risk around the renegotiation of its contract with U.S. wireless operator Sprint, its biggest customer (55% of revenue during the last quarter).

On July 29, 2010, TeleNav informed its shareholders that it had started negotiations regarding contract roll-over with Sprint, writing: “TeleNav anticipates that any extended agreement would result in declines in ARPU and significant reductions in total revenue from Sprint for bundled basic navigation services compared to the most recent quarter, but would also likely result in continued increases in the number of subscribers. TeleNav cannot predict whether or when it will reach agreement with Sprint on these matters or what the ultimate financial impact would be.” On this news, TeleNav’s stock fell $3.47, to close at $5.44 per share on July 30, 2010.

Crystal clear IPO filing about Sprint contract

However, the IPO filing of TeleNav (S1 form – October 2009) and susequent filing with the SEC are crystal clear on their contract with Sprint, stating: "Our current agreement with Sprint expires on December 31, 2011; however, our right to be Sprint’s exclusive provider of Sprint Navigation expires on December 31, 2010. Commencing on December 31, 2010, Sprint may terminate its agreement with us at any time by giving us 30 business days prior written notice. Our failure to renew or renegotiate this agreement on favorable terms or at all, a termination of our agreement by Sprint or our failure to otherwise maintain our relationship with Sprint would substantially reduce our revenue and significantly harm our business, operating results and financial condition."

It is a common practice for specialized US law firms to seek class action status on such topics (GPS manufacturer SiRF faced the same type of complaint few years ago), but here their case seems particularly weak. It is however a pain in the neck for TeleNav.

Microsoft sues TomTom

Microsoft Corp. yesterday filed a patent infringement action against TomTom NV and Tom Tom, Inc. (the U.S. subsidiary of the Dutch company), in the U.S. District Court for the Western District of Washington and in the International Trade Commission (ITC). Microsoft is seeking damage relief for eight patents, five are specifically about portable navigation devices, while the remaining three cover file management techniques.

Microsoft issued the following statement from Horacio Gutierrez, corporate vice president and deputy general counsel of Intellectual Property and Licensing: “Microsoft has filed an action today in the U.S. District Court for the Western District of Washington and in the International Trade Commission (ITC), against TomTom NV and TomTom Inc. for infringement of Microsoft patents. We have taken this action after attempting for more than a year to engage in licensing discussions with TomTom. “

“We have an established intellectual property licensing program, and the patents involved in this case, relating to innovations in car navigation technology and other computing functionality, have been licensed by many others. In situations such as this, when a reasonable business agreement cannot be reached, we have no choice but to pursue legal action to protect our innovations and our partners who license them. Other companies that utilize Microsoft patents have licensed and we are asking TomTom to do the same.

“TomTom is a highly respected and important company. We remain open to quickly resolving this situation with them through an IP licensing agreement.â€?