Why Maps Are Becoming Free

A Brazilian Twitter follower, @rlcarbonell, asked “what do you have to say about this last move by Nokia Maps being ‘free’?” An important question, but one that cannot be answered in 140 characters.

Maps, and more to the point, the associated driving directions, are becoming free because the services that can be wrapped around them are more valuable than the map information itself. Google started the trend when it made free real-time, turn-by-turn driving instructions free on the Verizon Droid and, soon there after, other Android phones. Of course, google Maps has been free from the beginning on computers and many different handsets. But Google Maps used data from Tele Atlas (now owned by TomTom) and Navteq (acquired by Nokia) and Google did not buy the very expensive licenses required to provide real-time navigation.

Instead Google built its own database of North American maps with information it gathered while collecting the photos for Street View. Owning its own maps, Google could provide real-time nav without paying any license fees. And nav leads to very valuable search ads. Advertisers are willing to pay a lot per click for people on the interstate searching for motels because these inquiries turn into sales at a very high rate.

Earlier this month, Nokia, taking advantage of its ownership of Navteq and the fact that Google isn’t ready to go with its own maps outside North America, announced its free Ovi Maps service for selected Nokia smartphones in 70 countries. Monetizing free maps is somewhat more difficult for Nokia than for Google, but they two will do it by providing paid services around free maps.

Apple is likely to be the net player in the free nav game. The current standard Maps iPhone app, which does not provide real-time navigation, is just a rebranded Google Maps. But  last summer, Apple quietly bought a mapping company called Placebase and is thought to be developing its own in-house mapping capability. It’s just a matter of time before Apple announces its own free mapping application for the iPhone and other products.

All of this is bad news for the paid competition, of course. Providers of paid services for phones, such as Telenav and TeleCommunications Systems (formerly Networks in Motion) are coming under a lot of pressure. Probably the biggest loser is TomTom, unless it can find a way to make money from its expensive Tele Atlas data in this new world of free maps.

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3 Responses to “Why Maps Are Becoming Free”

  1. RLCarbonell Says:

    Thank you! And btw, you said this was going to happen in BW Tech&You back in 2007!

  2. Bob D Says:

    I have found Google maps on my iPhone to be very poor. They have taken me to the wrong place 3 out of the last 5 runs. Close but off by a few blocks.

    My Garmin is clearly superior. I only use Google in a pinch around home. I would not dream of not taking the Garmin on a road trip.

  3. Roberto Says:

    Steve, one problem I have just noticed in Nokia’s Press Release is that not all models has this free license. Probably the most popular Nokia Smartphone, even for corp use, the E71 is not getting this turn-by-turn navigation. This is only for newer models and upcoming models. This is definatelly putting the loyal Nokia customers against Nokia.

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