Garmin Hits Trouble Spot
For Garmin (GRMN) and TomTom, the battle for Dutch digital mapping company Tele Atlas is a fight for their future.
The two companies, best known for their automotive consumer navigation systems, run nearly head-to-head in global market share for their devices. Each hopes that the purchase of a mapping data provider yield a competitive edge.
Last week, Garmin raised the stakes in this battle further when it
Garmin's bid stunned investors and marked the beginning of what analysts see as an expensive bidding war. Indeed, one analyst believes Garmin is prepared to go as high as $5.5 billion.For Garmin, the addition of Tele Atlas will help it break out of its mold as a hardware company and gain entry to new markets in wireless and automotive segments by offering better local search, 3D-mapping and real-time traffic flow data, the company has said. But a victory for Garmin doesn't come without its share of problems. CIBC analyst Yair Reiner believes with the cash in hand and debt, TomTom could raise the price for Tele Atlas as high as $5 to $5.5 billion.
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