By Telecom
Lead Team: Mobile major Nokia has valued its Location & Commerce (Navteq)
business at EUR 4.1 billion.
During Q4
2011, Nokia formed the Location & Commerce business to drive value from its
leading mapping and location-based services platform.
Nokia conducted
annual impairment testing in Q4 in the context of its new structure and plans
for the future, and valued the Location & Commerce business at EUR 4.1
billion.
Nokia says
the Location & Commerce business is an important asset that is bringing differentiating
location-based services to Nokia, the Windows Phone ecosystem, and other
Microsoft products such as Bing.
Nokia
believes that this is the leading location-based services platform with an
opportunity to become tremendously powerful as computing goes more mobile, and
location increasingly becomes a critical organizing dimension for a person’s
experiences.
Nokia
estimates that the market is moving long-term from fee-based towards
advertising-based models especially in some more mature markets. It also
reflects recently announced results and related competitive factors in the
local search and advertising market resulting in lower estimated growth
prospects from its location-based assets integrated with different advertising
platforms.
Nokia’s
location & commerce business generated 25 percent increase in revenue at
EUR 1.09 billion in 2011 from EUR 869 million in 2010. In Q4 2011, sales were
EUR 306 million against EUR 265 million in Q4 2010.
Operating
loss from Location & Commerce business was EUR 1.5 billion in 2011 against
EUR 663 million in 2010. The Q4 operating loss was EUR 1.2 billion as compared
with EUR 148 million in Q4 2010.
The
year-on-year increase in Location & Commerce net sales in the fourth
quarter 2011 was primarily driven by higher recognition of deferred revenue
related to sales of map platform licenses to Smart Devices and, to a lesser
extent, by higher sales of map content licenses to vehicle customers due to
higher consumer uptake of vehicle navigation systems, partially offset by lower
sales to portable navigation devices (PND) customers.
Sequentially,
the increase in Location & Commerce net sales in the fourth quarter 2011
was primarily due to seasonally strong sales of map content licenses in the
vehicle segment due to higher consumer uptake of vehicle navigation systems and
increased sales of updates.
On a
year-on-year basis, the decline in Location & Commerce gross margin in the
fourth quarter 2011 was primarily due to a shift of research and development
operating expenses to cost of sales as a result of the divestiture of the media
advertising business.
Location
& Commerce non-IFRS research and development expenses decreased 16 percent
year-on-year reflecting a shift in expenses from research and development to
costs of sales related to the divestiture of the media advertising business.
Location & Commerce research and development expenses increased 1 percent
sequentially primarily driven by the timing of projects related to product
development.
Location
& Commerce made available Nokia Maps and Nokia Drive for Nokia’s new Lumia
smartphones. Nokia Maps is a mobile application that gives people new ways to
discover and explore the world around them, as well as enabling them to search
for addresses and places of interest. Nokia Drive is a dedicated in-car
navigation application, equivalent to a fully-fledged PND, including
voice-guided navigation in multiple languages for more than 100 countries, 2D
and 3D map views and day and night modes.
Location
& Commerce launched Nokia Pulse, an application that enables people to
instantly share their location or other information with family, friends or any
other pre-defined group.
Location
& Commerce commercially released Nokia Maps 3.08 for Symbian, providing
better and faster ways to find places and the best way to get there.
