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The Honolulu Advertiser
Posted on: Tuesday, July 31, 2007

Digital mapping anticipates huge growth

By Dave Carpenter
Associated Press

Hawaii news photo - The Honolulu Advertiser

Navteq geographic analyst Rich Joyce uses an electronic clipboard to locate points of interest as he updates the maps that go into GPS units.

CHARLES REX ARBOGAST | Associated Press

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CHICAGO — Getting lost is getting rarer nowadays, and any yahoo with a keyboard or a GPS device can find precise directions or pinpoint the location of an out-of-town landmark.

Now drivers hooked on digital maps are looking for more than just streets and turns. They want ever more accurate and up-to-date points of interest such as restaurants, gas stations, hotels and theme parks.

For digital mapmakers such as Navteq Corp., it's up to road teams like Ann McNeil and Rich Joyce to deliver.

Like luxury-class explorers, the geographic analysts cruise streets and roads in a tech-laden sport utility vehicle outfitted with a satellite tracking computer, electronic clipboard and rooftop cameras.

"Our customers are wanting more and more information," said McNeil, who has driven hundreds of thousands of miles in a decade at Navteq. "We're expanding all the time."

It's all part of a race with Dutch rival Tele Atlas NV to not only chart the world more accurately but to combine the maps with other relevant data.

A pioneer of the digital map business, Navteq produces maps and software found in automobile navigation systems, portable navigation devices made by Garmin Ltd. and other companies, and Internet sites such as AOL's Mapquest, Google Inc.'s Google Maps and Yahoo Inc.'s Yahoo Maps.

Navteq is the Rand McNally of the 21st century, according to Colorado-based map industry consultant Henry Poirot. And the rapid growth may be just starting.

Thanks to GPS and recent technology advancements, Navteq is fine-tuning ways to let consumers use a phone or other hand-held device to track their dogs, find where to jog in another city, learn how many calories they will burn doing it, learn where the nearest 24-hour gas stations are, and see current traffic and weather conditions. Tele Atlas has its own projects under way.

"There's a lot of competition going on," said Thilo Koslowski, an analyst for Gartner Inc. "Both companies are trying to show that their data is better, by being innovative in gathering more detailed information."

The mapping duel heated up last week with the announcement that Tele Atlas had agreed to a $2.6 billion acquisition by TomTom NV, the world's largest maker of personal navigation devices.

While that should make the combined European company a stronger foe, Navteq's stock also soared. Analysts said TomTom's competitors, such as Garmin, may now go to the Chicago-based company for their maps rather than buy from a rival.

Navteq would like to improve its current share, which already includes most of the Internet mapping market and a split of the hand-held device market with Tele Atlas. Its European rival drives the roads, too.

The biggest threat facing the two competitors in the future may be user-generated map content — a mapping equivalent of YouTube, as it were.

Google also could be a rival. The Internet search leader is deep into research, development and even acquisitions related to its mapping services.

Navteq has shown a knack for adapting to changing technology.

The company was born in 1985 as Navigation Technologies, focusing on kiosks at car-rental agencies and hotels where patrons could print out directions and maps for chosen addresses.

Navteq finally became profitable in 2002, thanks to Global Positioning Systems, a boom in car-based navigation guides and its increasing grip on the exploding Internet mapping market. An initial public offering in 2004 helped ignite fast growth, and today it has more than 3,000 employees in 30 countries and a new headquarters in Chicago.

The company made $110 million on $582 million in sales last year and posted big gains in both categories in the first quarter. It reports second-quarter results today.

A heavy reliance on the slowing auto market, which accounted for nearly all its sales in 2000 and still brings in about 60 percent, has sent its stock price on a bumpy ride. Hoping to smooth things out, CEO Judson Green has steered the company into more diversification.

To map 12 million miles and 69 countries, Navteq has used an estimated 100,000 different sources, from satellite images and aerial photography to maps issued by local governments and commercial companies.

But to Green, the "secret sauce" keeping the company on top of the mapping world is the 700 employees who spend half their work time behind the wheel or in the passenger seat.

"I would say that 80 to 85 percent of the effort that we put into making a digital map is from that very labor-intensive driving that we do," he said. "We cannot find the quality, accuracy or richness of the information from all these other sources unless we go do it our way."