074 Info Tech

WHAT'S NEXT
I
076 Marketing
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080 Finance
084 Entrepreneurs
086 Asian Hot Growth
Entertainment

By Arik Hesseldahl
INFO TECH First, cellphones made the street-
corner pay phone obsolete. Now
they're doing away with the need to

The Paperless Map ask for directions. A surge in phones

with built-in satellite navigation ca-
pability has sparked a wave of creative
mapping and locating services. And

Is the Killer App it has set off a multibillion- dollar

Forget media downloads. Cell customers really
want GPS and navigation features
scramble by companies to buy up digi-
tal navigation technologies.
The number of navigation-ready
cellphones will hit 162 million this
year, or more than seven times the
number of such devices sold for use in
cars or other nonphone gadgets, says

NOVEMBER 26, 2007 I BUSINESSWEEK

 WHAT'S NEXT

researcher iSuppli. You only have to GPS-equipped Nextel cell phones. The for $2.3 billion. Stock in rival Navteq
scan phone company ads to see how phones offer such features as spoken soared on the expectation it would be
they are touting navigational features: turn-by-turn directions. acquired by Garmin, TomTom's Olathe
The new N05 smartphone from Nokia Such options until recently could (Kan.)-based competitor, or perhaps
plays music and videos, but it also has be found only in $300-plus dashboard Google or Microsoft, which operate
a chip that receives signals from the devices. The software, from TeleNav, a mapping sites. But on Oct. 1 phone gi-
government's Global Positioning Sys- Sunnyvale (Calif.) company, costs each ant Nokia jumped in with an $8.1 billion
user $10 a month. deal to buy Navteq—a price nearly 14
But Ramundo times its $582 million in 2006 sales.
This spring, wireless users spent nearly says efficiency Faced with having to buy mapping
twice as much on navigation as they did to gains for medi- data from a competitor, Garmin an-
cal workers more nounced on Oct. 31 a hostile $3.3 billion
download music to their phones bid for Tele Atlas. TomTom responded
than offset the
added costs: "Ev- with a $4.3 billion offer. Garmin has un-
ery hour they're til Dec. 4 to counter. The buyout binge
tem satellites, enabling the phone to not here in the office getting directions isn't likely to end there. Analysts say
display maps. Research In Motion is al - or getting lost is a billable hour they're possible targets include TeleNav, which
ready putting navigation features into out seeing patients." supplies navigation software to carri-
its BlackBerry smartphones. Other big ers, and its rival Networks In Motion of
phonemakers including Motorola and THE GPS BANDWAGON Aliso Viejo, Calif. Also in the spotlight
Samsung are doing the same. Apple, For years, satellite-based naviga- is Kirkland(Wash.)-based Inrix, spun
having put a version of Google Maps tion technology was restricted to the off from Microsoft in 2004. It supplies
on its iPhone, is widely expected to add military, which used it to position live traffic data on 55,000 miles of U.S.
GPS chips and live mapping in 2008. troops or guide missiles. The govern- roads. Its sole competitor, Traffic.com,
Phone carriers and software devel- ment purposely made GPS signals too was bought earlier this year by Navteq,
opers alike have been quick to offer fuzzy for civilians other than hikers or and is becoming part of Nokia.
location-based services that go way boaters to find useful. That changed For navigation outfits that see Nokia
beyond simple street directions. Veri- in 2000, though, when civilians were as a competitor, that raised the pos-
zon's Chaperone service allows parents given access to more accurate signals. sibility of losing access to traffic data as
to track the location of kids from their An industry quickly sprang up for well as mapping data. So they're furi-
phones or on the Web and sends a mes- car-based navigation, which is a $6.8 ously signing agreements with Inrix,
sage when they reach their destination. billion business today, says iSuppli. says President and CEO Bryan Mistele:
Loopt lets Sprint and Boost Mobile Now GPS phones are embedded with "The last 120 days have been the best
customers track friends—imagine tiny chips that receive signals from days in our company's history." 1BW1
a buddy list overlaid on a map—and the collection of 31 GPS satellites that
sends alerts when they're nearby. blanket every inch of the Earth with a
Services like those rang up $92 million faint radio signal. A receiver needs to be
in sales in the third quarter, or 58% of within range of at least four satellites at LINKS
what consumers spent to download once to determine its location accurate-
software to phones, Nielsen Mobile ly. That is drawn on-screen, matching Navigation Games
found. This spring, wireless users latitude and longitude with maps sent All sorts of outdoor games have
spent on average nearly twice as much via wireless Net connections. sprung up around GPS devices.
The earliest is geocaching, a
on navigation as they did to download As more players jump into naviga- global treasure hunt in which
music to their phones, says David Gill, tion, it has triggered a wave of deal- participants hunt down hidden
a Nielsen Mobile analyst. making that reflects the nervousness objects using satellite navigation
and Web-posted coordinates and
To understand why phone-based of established players. Makers of car- replace the items with something
navigation is suddenly so hot, talk with based or other dedicated (nonphone) else. In geodashing golf, you rack
Debby Ramundo. The senior project devices worry that competitors will up points based on how close you
manager at Seattle's Swedish Medical gain control of essential mapping data, get to 9 or 18 computer-generated
points in a selected area (the
Center, Ramundo oversees 200 doctors which show names and locations of
GPSgames.org site says "the
and nurses who visit patients who can't streets, homes, restaurants, and hotels course creation engine does try to
travel to a doctor's office. Like millions and must be regularly updated. keep the holes out of the ocean").
of other people, clinicians are hard- The two companies supplying that And GPSManiac.com suggests
pressed to get to the right place on time. data, Chicago-based Navteq and Neth- geocapsuling to get family
members out of the house: Hide a
That can be especially tricky in fast - erlands -based Tele Atlas, are now being gift—say, the keys to a new car—in
growing Seattle, where new residential rolledup. In July, one of the largest a faraway place and put the
streets pop up out of nowhere. So last car-navigation outfits, Dutch concern coordinates on a card.
year the medical center handed out TomTom, moved to acquire Tele Atlas

BUSINESSWEEK I NOVEMBER 26, 2007