Nokia, the Finnish mobile phone giant, has agreed to acquire navigation software maker Navteq for a whopping $8.1 billion, marking its biggest acquisition to date. The move highlights the company's interest to capitalize on the emerging market for mobile search as a people increasingly use their Internet-enabled handsets to look for help getting from one place to another.
Although the company may struggle to generate a good return on that investment soon, Nokia believes that location-based services could become one of the most important mobile applications, taking advantage of the fact that users always have their handsets with them to view their current location on a map, search for destinations, find specific routes, or locate nearby services, while advertisers will certainly pay for a piece of the action.
Nokia already dominates the global handset market, but now it is pushing hard into the mobile Internet and is calling the location-based services gained from its purchase of Navteq a cornerstone of its Internet services strategy. The Navteq map data business will continue to operate independently, but it will be organized as a Nokia group company.