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Recent independent research from leading analyst house Canalys examined the key players and business models in the mobile navigation and mapping market in EMEA. This white paper will discuss some of the highlights emerging from the research.
A closer look at selected mobile navigation players
Telmap Figure 1 clearly shows that at the end of Q3 2009, Telmap had the largest user base in EMEA, when excluding free trials. This is the result of Telmap’s cooperation with mobile operators to deliver a comprehensive range of mobile navigation solutions to end users. Operator-provided navigation services based on Telmap’s solution, either through a recurring subscription, or as an integral part of the mobile services package (operator-bundle), was the number one choice in EMEA, ahead of other propositions such as Nokia’s in Q3 2009. Telmap regularly refreshes its navigation solution and has established operator relationships. Its excellent crossplatform hosted and managed solution (see figure 2 for platforms supported), enables operators to offer navigation services on a wide-range of devices.
Figure 1: User base As of End of Q3, 2009
1,400,000 1,200,000 1,000,000
600,000 400,000 200,000 -
Source: Canalys estimates, © Canalys 2009
operator permitted. Nokia has announced it will follow Google and offer its navigation solution for free on its smart phones.Figure 2: Platforms (Operating Systems) Supported by Key Industry Players Others (Mostly Java) Total 8 6 6 5 4 3 Telmap Appello Wayfinder LocatioNet Navigon ALK Nokia TomTom X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Source: Canalys estimates. Nokia is experiencing low conversion rate from free to paying navigation customers. © Canalys 2009 X X 2 2 Nokia Nokia. will have an impact on its business. from Google and Nokia. new. winning customers primarily through price competitiveness. TomTom was late in introducing its phone-based solution. The average cost of navigation applications for the iPhone is likely to come down in 2010 as consumers’ willingness to pay erodes. competing propositions that are perceived as free will reduce the average selling price for its Apple iPhone GPS navigation solution. UK). It is the leading PND vendor in EMEA and has a range of connected PNDs. . and is currently the leading navigation app in some significant Apple app store geographies (e. as some operators prefer to push selected partners’ LBS applications. ALK has long-standing relationships with Microsoft and HTC. Nokia plays an important role in making GPS available to the mass market. as it is the leading handset vendor globally and has GPS integrated into a broad range of its phones. In recent days. ALK ALK was quick to take advantage of the application store opportunity. It also owns map provider Tele Atlas. As TomTom also relies heavily on the “paid” business model. has been heavily investing in this field in recent years. who owns map provider NAVTEQ. resulting in a focused yet narrow smart-phone platform strategy (see figure 2 above). Nokia pre-installs maps on all its phones. TomTom TomTom has excellent brand awareness and association with GPS navigation.. Time will tell if this is going to succeed or follow other Nokia offerings such as “N-Gage” and “Comes with Music” that have failed to reach mass adoption. new. The flip side of this success is running the risk of getting lost in the crowd of applications offered on app stores. although developers do seem to flock to other platforms to deliver LBS apps. Despite these clear advantages. competing propositions that are perceived as free. and regards maps as a key pillar of the Ovi service strategy.g. has a limited platform support (see figure 2 above) and didn’t realize in time the growing popularity of phone-based navigation. As ALK relies mostly on the “paid” business model.
A variety of business models is available: Operator-provided navigation looks like a winner The Canalys research examined a variety of pricing/business models that are used today in mobile navigation and their popularity in EMEA as of the end of Q3. the average selling price it can command for its iPhone application will come under pressure in 2010. followed by locationenabled advertising. Below you can see the chart detailing the common pricing models for the entire market. Navigon continues to struggle with poor consumer awareness outside the DACH region and has very few operator and handset manufacturer relationships in place. taking over the more traditional “paid” business model. adding to its many benefits and advantages real-time location information. even with the introduction of competing propositions that are perceived as free. mainly based on off-board solutions.Navigon Navigon is a leading navigation brand in Germany with a broad portfolio of PNDs.400. Telmap believes that in 2010. attracting advertisers to the mobile domain remains a challenge. Although it seems customers are happy to pay in order to increase functionality. and it will take some time for mobile advertising to take off. Its business is heavily reliant on Germany. valid business model. The research results show that ad-funded mobile navigation still struggles and is not yet a strong. which we saw more and more of in 2009. 2009. operator-provided LBS bundled into the tariff plan will continue to dominate and evolve as the winning mobile LBS strategy.000 User Base Advertising funded Operator bundled Paid Handset bundled (long term) Source: Canalys estimates. © Canalys 2009 The research confirms that the introduction of navigation as part of operator’s data and tariff plans. as users now get to enjoy an additional service as part of the overall value bundled into their mobile services package. both for on-board and off-board solutions. . and as Navigon also relies heavily on the “paid” business model. Nevertheless.000 1.000 1.000 600.000 800.000 200. once it did. it was quick to take advantage of the Apple app store opportunity.000 400. Figure 3: Common Pricing Models in EMEA 1. Telmap believes that location-enabled advertising poses a great opportunity as it is the “holy grail” of mobile advertising. Although Navigon was a bit late entering the mobile navigation arena.200.000. is proving successful at increasing end user adoption rates.
they can use the service on simple devices as well. This included operator offerings that require consumer payment. Off-Board Solution: A connected turn-by-turn navigation where the routing calculation is performed on and by a remote server. Figure 4: Phone-Based Navigation Solutions in EMEA 45% 55% On-Board Navigation Solutions Off-Board Navigation Solutions Source: Canalys estimates.1.6 million people using either off-board or on-board phonebased navigation solutions in EMEA on a regular basis (excluding trial offers). On Board Solution: A turn-by-turn navigation solution in which the routing calculation and map storage is performed locally on the device. 4. As all the data resides on the server and not on the device itself. or where the cost is subsidized in part. and more. 2. ad-funded. Handset-bundled (long term): A turn-by-turn navigation solution which has a free period of usage of one year or greater bundled into the cost of a handset. © Canalys 2009 On-board navigation solutions are offered mostly through a one-time fee followed by paid-for periodical map updates. people don’t have to purchase high-end smart phone devices.. Advertising-funded: A turn-by-turn navigation solution that is either paid for. and not on the device itself. As memory requirements are lower. . such as: Up-to-date. the cost of which is absorbed by a mobile operator or included within a customer's tariff. by advertisements. Paid: A turn-by-turn navigation solution which a consumer pays to use. new/updated content can automatically be downloaded to the client with no need for a client upgrade. high-quality and accurate map data and content information (e. and they present several significant advantages over on-board navigation. as well as the map storage. Off-board solutions are offered on many devices. 3. whereas off-board navigation solutions come in a variety of flexible pricing models such as operator-bundle.g. Servers can offer much stronger computing power than handheld devices. This represents an extremely low upfront cost for the user and enables a wider reach and uptake of the service. The whole process is seamless and automatic – the end user simply sees the new/updated content without having to do anything. Off-board phone-based navigation solutions are becoming more common According to the research there are slightly more than 2. memory requirements are significantly lower than in on-board solutions. traffic reports) The heavy calculations needed for optimal navigation are done on the servers. giving the user more choice and control. Here are the definitions for the above mentioned business/pricing models: Operator-bundled: A turn-by-turn navigation solution. especially with GPS-enabled devices becoming more and more accessible. As content additions or updates in off-board solutions are made on the server side.
These advantages help bring an enriched navigation experience and an improved user experience to end-users. © Canalys 2009 Figure 6: Players Offering On-Board Navigation in EMEA 2% 4% 2% 12% ALK 21% Garmin Nav N Go 5% Navigon NDrive 33% 6% 12% 3% Nokia Others Route 66 Sygic TomTom Source: Canalys estimates. © Canalys 2009 . and therefore Telmap believes that off-board solutions will become more and more popular in 2010. Below are two charts detailing the market share of several players offering off-board and on-board solutions in EMEA: Figure 5: Players Offering Off-Board Navigation in EMEA 1% 8% 7% 0% Appello Others TeleNav Telmap 84% Wayfinder Source: Canalys estimates.
7 million users in EMEA use phone-based mapping solutions with 80% of them using free mapping solutions. this may change in the future. 2009. and may take a toll on Google maps distribution. This category refers to the preinstalled maps application provided by Apple on the iPhone. 26. An interesting point to note is the Apple/Google category. © Canalys 2009 . This application is currently based on maps provided by Google. Figure 7: EMEA Phone-Based Mapping Solution Market as of end of Q3. Figure 8: EMEA Phone-Based FREE Mapping Solution Market as of end of Q3.A closer look at Mapping Solutions in EMEA As of the end of Q3. 2009 6% 32% 41% Google Apple/Google Nokia 21% Others Source: Canalys estimates. © Canalys 2009 When looking into the free mapping solutions (see figure 8 below) we can see that Google maps is the most popular free mapping application. 2009 2% 18% Free map solution users Paid map solution users 80% Navigation solution users Source: Canalys estimates. Taking into consideration the strained relationships between the two companies.
As a result.How do users get it? Pre-installed on Device Downloaded by User 0% 33% 0% 30% 100% 66% 100% 70% Google Apple/Google Nokia Others Source: Canalys estimates. enter the market. as clearly reflected in the Canalys research. Figure 9: Free Mapping Solutions . There are several key findings to the Canalys research: Telmap.6 million people using mobile navigation in EMEA on a regular basis. The motivation is not only additional revenues but also meeting customer expectations and enhancing perceived value. As operator-provided navigation solutions are extremely popular. © Canalys 2009 Summary Smart phones. leads the mobile navigation solutions market in EMEA. This trend is expected to continue to evolve as a winning LBS strategy as new. when excluding trial customers. attracting a huge amount of attention. mobile navigation is now expected on more and more devices. are the fastest growing mobile phone sector.If we examine the ways users get their free mapping solutions (see figure 9 below). the expectation is that the bundle business model will increase in popularity and become the leading model over the paid subscription model. which is a key and critical success factor. . and clearly prefer the convenience of using something that’s already installed for them on their device. As there are already 2. there are still plenty of opportunities to generate revenues from such solutions. Off-board solutions are expected to grow in demand as they offer significant value and enhanced user experience over on-board solutions. making it more and more popular and frequently used. who is working with mobile operators. the majority of which are GPS-enabled. competing solutions that are perceived as free. it is clear that users are much more likely to use applications that are pre-installed on their device and less likely to actively download applications. Mobile operators have been looking for ways to optimize navigation services delivery to end-users and increasingly see the benefit of bundling it with tariff plans. This emphasizes the significance of pre installing mapping and navigation solutions. Mapping applications that are pre-installed on devices are much more likely to succeed as users are not very likely to download such applications themselves.
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