Nokia has said that Navteq will operate independently as a separate unit within Nokia in order that 'current and future customers continue to have a dedicated and strengthened unit serving them' (in other words being able to serve other customers who may be competitors of Nokia).
Nokia believes that location will be a corner stone of future mobile and Internet services. Navteq, or mores specifically its GIS data (maps plus geo-meta-data) represent a core building block in this future and having direct control puts Nokia in a very strong position to fully exploit the potential.
One area that is drawing particular attention is location aware advertising on mobile devices. The idea being that if first generation context senstive ads have worked well (e.g. Google AdWords / AdSense) then second generation context sensitive ads (that can call upon location context) will work even better.
Clearly the Navteq acqusition can be seen, at least in part, as a competitive response to Google with its Maps and Advertising products.
Nokia is paying a lot of money for Navteq (which had revenues of $581 million in 2006). However in the years to come I suspect we'll look back with hindsight and think this was an attractive price and a shrewd move on Nokia's part.
From the press release:
"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. We also look forward to maintaining and enhancing the services and support provided to Navteq’s existing and future customers."
Thanks to IntoMobile for the heads up.