Mobile Navigation and Mapping in EMEA: Key Players and Business Models

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

800,000
600,000 400,000 200,000 -

Source: Canalys estimates, © Canalys 2009

has been heavily investing in this field in recent years. ALK ALK was quick to take advantage of the application store opportunity. as some operators prefer to push selected partners’ LBS applications. will have an impact on its business. ALK has long-standing relationships with Microsoft and HTC. TomTom was late in introducing its phone-based solution. 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. In recent days. has a limited platform support (see figure 2 above) and didn’t realize in time the growing popularity of phone-based navigation. new. Nokia has announced it will follow Google and offer its navigation solution for free on its smart phones. As ALK relies mostly on the “paid” business model. The average cost of navigation applications for the iPhone is likely to come down in 2010 as consumers’ willingness to pay erodes. resulting in a focused yet narrow smart-phone platform strategy (see figure 2 above). Nokia is experiencing low conversion rate from free to paying navigation customers. from Google and Nokia. winning customers primarily through price competitiveness. although developers do seem to flock to other platforms to deliver LBS apps. © Canalys 2009 X X 2 2 Nokia Nokia.. Nokia pre-installs maps on all its phones. The flip side of this success is running the risk of getting lost in the crowd of applications offered on app stores. As TomTom also relies heavily on the “paid” business model. Nokia plays an important role in making GPS available to the mass market. operator permitted. as it is the leading handset vendor globally and has GPS integrated into a broad range of its phones. TomTom TomTom has excellent brand awareness and association with GPS navigation. who owns map provider NAVTEQ. and regards maps as a key pillar of the Ovi service strategy. and is currently the leading navigation app in some significant Apple app store geographies (e. UK). . competing propositions that are perceived as free.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. It is the leading PND vendor in EMEA and has a range of connected PNDs.g. It also owns map provider Tele Atlas. competing propositions that are perceived as free will reduce the average selling price for its Apple iPhone GPS navigation solution. Despite these clear advantages. new.

000 800. 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 Q3.400. attracting advertisers to the mobile domain remains a challenge.200. once it did. Although it seems customers are happy to pay in order to increase functionality. operator-provided LBS bundled into the tariff plan will continue to dominate and evolve as the winning mobile LBS strategy. mainly based on off-board solutions. adding to its many benefits and advantages real-time location information. Although Navigon was a bit late entering the mobile navigation arena. Its business is heavily reliant on Germany. Telmap believes that location-enabled advertising poses a great opportunity as it is the “holy grail” of mobile advertising. Telmap believes that in 2010. it was quick to take advantage of the Apple app store opportunity. 2009. . is proving successful at increasing end user adoption rates.Navigon Navigon is a leading navigation brand in Germany with a broad portfolio of PNDs. as users now get to enjoy an additional service as part of the overall value bundled into their mobile services package. © Canalys 2009 The research confirms that the introduction of navigation as part of operator’s data and tariff plans. the average selling price it can command for its iPhone application will come under pressure in 2010. valid business model.000. and it will take some time for mobile advertising to take off. even with the introduction of competing propositions that are perceived as free.000 1. Below you can see the chart detailing the common pricing models for the entire market. The research results show that ad-funded mobile navigation still struggles and is not yet a strong.000 1.000 600. which we saw more and more of in 2009. followed by locationenabled advertising.000 400. taking over the more traditional “paid” business model. Navigon continues to struggle with poor consumer awareness outside the DACH region and has very few operator and handset manufacturer relationships in place. both for on-board and off-board solutions.000 User Base Advertising funded Operator bundled Paid Handset bundled (long term) Source: Canalys estimates. Figure 3: Common Pricing Models in EMEA 1. and as Navigon also relies heavily on the “paid” business model.000 200. Nevertheless.

2.   On Board Solution: A turn-by-turn navigation solution in which the routing calculation and map storage is performed locally on the device. high-quality and accurate map data and content information (e.6 million people using either off-board or on-board phonebased navigation solutions in EMEA on a regular basis (excluding trial offers). whereas off-board navigation solutions come in a variety of flexible pricing models such as operator-bundle. Off-board phone-based navigation solutions are becoming more common According to the research there are slightly more than 2. such as:      Up-to-date. Figure 4: Phone-Based Navigation Solutions in EMEA 45% 55% On-Board Navigation Solutions Off-Board Navigation Solutions Source: Canalys estimates. and more. .. traffic reports) The heavy calculations needed for optimal navigation are done on the servers. 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. As memory requirements are lower. ad-funded. and not on the device itself. The whole process is seamless and automatic – the end user simply sees the new/updated content without having to do anything. 3. by advertisements. © Canalys 2009 On-board navigation solutions are offered mostly through a one-time fee followed by paid-for periodical map updates. they can use the service on simple devices as well. Servers can offer much stronger computing power than handheld devices. people don’t have to purchase high-end smart phone devices. Off-Board Solution: A connected turn-by-turn navigation where the routing calculation is performed on and by a remote server. or where the cost is subsidized in part. As all the data resides on the server and not on the device itself. This represents an extremely low upfront cost for the user and enables a wider reach and uptake of the service. memory requirements are significantly lower than in on-board solutions. the cost of which is absorbed by a mobile operator or included within a customer's tariff. Here are the definitions for the above mentioned business/pricing models: Operator-bundled: A turn-by-turn navigation solution. This included operator offerings that require consumer payment. Off-board solutions are offered on many devices. giving the user more choice and control. especially with GPS-enabled devices becoming more and more accessible. Paid: A turn-by-turn navigation solution which a consumer pays to use. Advertising-funded: A turn-by-turn navigation solution that is either paid for.1.g. new/updated content can automatically be downloaded to the client with no need for a client upgrade. and they present several significant advantages over on-board navigation. As content additions or updates in off-board solutions are made on the server side. 4. as well as the map storage.

These advantages help bring an enriched navigation experience and an improved user experience to end-users. 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. © 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 .

this may change in the future.A closer look at Mapping Solutions in EMEA As of the end of Q3. © Canalys 2009 .7 million users in EMEA use phone-based mapping solutions with 80% of them using free mapping solutions. 2009 2% 18% Free map solution users Paid map solution users 80% Navigation solution users Source: Canalys estimates. Figure 8: EMEA Phone-Based FREE Mapping Solution Market as of end of Q3. This category refers to the preinstalled maps application provided by Apple on the iPhone. 2009 6% 32% 41% Google Apple/Google Nokia 21% Others Source: Canalys estimates. An interesting point to note is the Apple/Google category. © 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. Taking into consideration the strained relationships between the two companies. and may take a toll on Google maps distribution. 26. This application is currently based on maps provided by Google. Figure 7: EMEA Phone-Based Mapping Solution Market as of end of Q3.

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. competing solutions that are perceived as free. enter the market.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. This emphasizes the significance of pre installing mapping and navigation solutions. when excluding trial customers. There are several key findings to the Canalys research:   Telmap. As operator-provided navigation solutions are extremely popular. there are still plenty of opportunities to generate revenues from such solutions. which is a key and critical success factor. attracting a huge amount of attention. 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. Off-board solutions are expected to grow in demand as they offer significant value and enhanced user experience over on-board solutions. the expectation is that the bundle business model will increase in popularity and become the leading model over the paid subscription model. The motivation is not only additional revenues but also meeting customer expectations and enhancing perceived value.   . mobile navigation is now expected on more and more devices.If we examine the ways users get their free mapping solutions (see figure 9 below). Figure 9: Free Mapping Solutions .6 million people using mobile navigation in EMEA on a regular basis. making it more and more popular and frequently used. As a result. as clearly reflected in the Canalys research. 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. are the fastest growing mobile phone sector. the majority of which are GPS-enabled. who is working with mobile operators. and clearly prefer the convenience of using something that’s already installed for them on their device. leads the mobile navigation solutions market in EMEA. © Canalys 2009 Summary Smart phones. As there are already 2. This trend is expected to continue to evolve as a winning LBS strategy as new.