So the battle of GPS giants ended with a bit of a whimper. Garmin withdrew from the bidding for TeleAtlas and simultaneously announced an extended deal with Navteq, who will continue providing maps to Garmin until 2015. It makes you wonder how much say Nokia, who is in the process of buying Navteq, had in the negotiation of the Garmin contract extension.
In spite of Garmin's denials, rumour continues to swirl that the company is considering building out its own map-making network. That would be a heavy, multi-year investment and one Garmin's shareholders ought to be interested to hear about. But it may also be the only way to to de-risk a business whose main offering now depends on a large potential rival that wants to own the navigation and location-based services (LBS) market.
For now, the markets appear relieved that Garmin did not overpay for TeleAtlas, sending Garmin's share price up 14%. The kind view is that Garmin's bid was anyway just a gambit to force TomTom into paying an outlandish price (38 x 2007 EBITDA) for its own mapmaker. But Garmin's future now contains a big hairy unknown, which has yet to be priced into the stock...
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