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Nokia Corporation Message Board

  • calbucks09 calbucks09 Apr 2, 2013 10:12 PM Flag

    Can Navteq ever turn a profit?

    thats a real question for me. looking through the annual reports I notice that NOK still carries over $3billion in goodwill as an asset on the books. That could become problematic if Maps division can't significantly improve sales.

    Seems like maps makes a ton of sense in this arms race for mindshare, so its a bit puzzling that they have not had a profitable year since the purchase of navteq despite being in most of the largest euro auto manufacturers.

    Why does maps matter? at $3billion+ of the balance sheet in goodwill that means the book value might have to be written down to reduce that goodwill carrying amount. Nok already wrote down more than 2 billion in goodwill on the purchase, so its entirely possible another chunk needs to be written down later this year. The anual report states that an increase of 0.5% in the market discount rate would alone cause a writedown.

    They really should think about how to monetize this beyond autos and cell phones imo... that or just sell the thing to MSFT with a 10 year licensing provision to use the maps.

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    • when there are 100M + Lumia devices each with maps, you'll see profits alright, search, advertisements, etc....HERE is in the process of wreaking much havoc for Google. already has in auto industry. Nobody wants inferior mapping technology. NavTeq is by far and way #1. Mapping is THE killer app. NavTeq as an entity doesn't need to turn a profit, it just needs to support the rest of the Nokia franchise IMO.

      Sentiment: Strong Buy

    • thermonuke@ymail.com thermonuke Apr 2, 2013 10:17 PM Flag

      That's EUR $3B, as of the Q4 goodwill assesment I believe. NOK realized none of it in Q4. But they realized $1B alone in one of the 2011 quarters, yes it is scary I've mentioned it before.

      However, HERE achieves profitability when Smart Devices approaches 8-10M it looks to me. Since HERE collects a license fee for every NOK Smart Device sold, and HERE took about $200M from automobile nav systems, 8-10M Lumia devices should swing it to a profit.

      Clients like ORCL and the prift potential remains to be seen, as the Q4 offered no insight to the ORCL deal.

      • 1 Reply to thermonuke
      • yes quite right. Euros, not USD funny money.

        My anxiety grows higher hearing that they depend on a related party arms length licensing royalty from their own parent company as part of the breakeven plan. I get what you mean that 1o million smartphones is achievable, but transferring profit out of smartphones into 'HERE" is not accretive to shareholders... its just passing the liability from one internal account to another.

        I just d/l the ipad app... its pretty weak in terms of UI. data is solid though. They could do so much more.

 
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