Satellite navigation device manufacturer TomTom has been given the green light by the European Commission to proceed with its US$4.2 billion acquisition of global digital mapping player Tele Atlas. The deal is aimed at enabling TomTom to expand its business beyond its hardware offering – where profit margins are tipped by analysts to decline – into the content business for mobile phones and wireless devices.
The move is the latest development in the fast-growing mobile GPS space. The Commission is now expected to focus on Nokia’s US$8.1 billion acquisition of Navteq – Tele Atlas’ only global rival – which was first announced last October and is believed to be subject to close scrutiny at present. Also this week, Nokia announced it is launching an online mapping service on its mobile Web platform Ovi, which uses technology from Navteq. Nokia plans to add navigation software to half of the phones it sells by 2012 as it attempts to find new revenue streams amid decreasing mobile phone prices. The company aims to ship 35 million GPS units this year.