Nokia has agreed to buy the digital mapping company Navteq for US$8.1 billion (NZ$10.6 billion), as part of a plan to add navigation capabilities to more of its devices.
Chris Jones, a principal analyst at Canalys, says buying Navteq may be a defensive move to prevent another company from acquiring it. He named Microsoft, Yahoo and Google as potential suitors. All three have been increasing their map-based services.
Navteq will also give Nokia a profitable services arm at a time when average selling prices for its phones have been falling.
"Most of the profit in the navigation market has been taken by device vendors like TomTom and Garmin. But we still believe there's a huge amount of value in the map data," Jones says.