exploding future market: NAVIGATION TECHNOLOGY

Discussion in 'Trading' started by the_inquisitor, Oct 5, 2004.

  1. hello world.

    Tehre is a raising future market which has been undiscovered by investors yet:
    navigation technology.
    Nowadays only few luxury class cars come with navigation systems (less than 10% of new cars are sold with such systems) - in near future nav systems will be standard even on compact cars. Further nav systems will be integreated in mobile phones and PDAs and will help not only find a certain street as car nav systems do but will lead you to a certain building and will even know where to find certain house numbers. There are also a lot of so called location based services providing cell phone users local information, like where to find ATMs, restaurants, hotels etc., that will be standard tomorrow.
    By the way the US already passed a law urging cell phone producers to integrate GPS receivers in all devices sold from 2007 on to be able to localize any emergency call, so every cell phone will have the hardware basis to be capable of nav applications.
    Doubtless there is a huge future market growing. By the next years not only most new cars will have nav systems onboard, but everyone who is carrying a cell phone will carry a nav system in his pocket that will guide you through unknown cities tomorrow.

    Besides the hardware basis for nav sytems, which is provided by the US government (GPS) and in future also by the European Union (Galileo) and the adequate user devices, which are produced by major companies you need digital maps to make the coordinates provided by GPS or Galileo visible.
    GPS and Galileo only provide a signal allowing the user device calculating a position, but the user devices must know by themselves, where roads are, where they conduct to, where gas stations are etc.
    These digital maps, which are highly expensive and time-consuming to create and as much to maintain come from only two companies:
    Navteq (NVT) and TeleAtlas (TATL.DE)

    Their data is used in almost every scenario, where digital maps are needed. These two competitors provide data not only for all the car nav systems but also for all digital maps on the internet (see mapquest.com, map24.com), for cell phone operators for their location based services, for parcel services to calculate optimized routes etc.
    Wherever you need digital maps you will need data from Navteq or TeleAtlas - only these two companies have acceptable complete databases of North America and Western Europe.

    Since setting up such databases is highly expensive (approx. >$500) and time-consuming we don't have to expect any future competitor.
    Allthough Navteq has currently a better market position due to it's better position in the US and globally in the OEM market, TeleAtlas is on it's way to gain market share. Aquiring the former number three in the digital map market GDT in 2nd quarter of this year has given TeleAtlas a good position to conquer North America.

    My personal prediction for the next two years is:
    NVT $ 60-80 (current rate: $ 35,44)
    TATL € 30-60 (current rate: € 8,80) - on a German board (http://www.wallstreet-online.de/si/...cat=STK&spid=ws) some users expects a rate of € 100 by end of 2007!!!

    TATL.DE (German Xetra market):
    <img src="http://cchart.finance.ukl.yahoo.com/z?s=tatl.de&a=v&p=s&t=3m&l=off&z=m&q=l&i=de">

    NVT (NYSE)
    <img src="http://cchart.finance.ukl.yahoo.com/z?s=nvt&a=v&p=s&t=3m&l=off&z=m&q=l&i=de">

    However, there is a huge market growing, which I would like to discuss (especially TATL's and NVT's position) more detailed with those, who are interested in this market segment.
  2. thank you for the data.

    however, it is my contention, that it is a little late.

  3. Maybe it's late for investing in NVT on the short-term, but TATL will go north and pass at least € 10 this year.
    However for mid-term investors both stocks are an opportunity to double (or even more) their investment.

    Nav technology is more than just some application - it's a key technology which will be used by everyone as the internet is used.

    Anyway, only the development of the in-car nav system market in the next years will warrant the rates, I forecasted before.

    I think we are right now at a stage like Microsoft was in the late 80s.
  4. that is very possible. thank you again for the research.

    surfer :)
  5. I never get lost.
  6. Good for you - but can you foresee traffic jams on your way to work? Can you tell, where to find a vacant car park before you have even reached downtown?
    And when you are in downtown, will you sense, that your best friend is just half a mile away?
  7. NVT has passed $39 today!

    That's crazy!

    Those buyers should better have an eye on TeleAtlas (TATL.DE) - just compare the relation of FCF and stock rate.

    Navteq currently is definitly in a better situation, but TeleAtlas works up it's turnover in the car nav sector nearly only by supplying Blaupunkt's nav systems, which is a Bosch subsidiary as TeleAtlas was (see below), with their map data.
    So TeleAtlas can't lose market share - they can only win!

    By the way TeleAtlas has a very serious background. As former Bosch subsidiary (I suppose Bosch is as well known in the US as in Europe - one of the major automotive suppliers of high tech components, see www.bosch.com), Bosch still holds 31,90% of TeleAtlas and since Bosch produces car nav systems (Blaupunkt, see www.blaupunktusa.com) for DaimlerChrysler and other major automobile producers, they are highly interested in having a digital map supplier in their concern.
    Bosch is one of the best situated non-stock-companies I know. I think TeleAtlas won't ever have to worry about financing issues.
    There are also rumors that the financing of the GDT acquisition, which was carried out by a Oak Investment Partners and New Enterprises Associates led consortium has its' origin on Bosch's executive floor.

    Anyway, the automotive industy is interested in competition in this market, so I would think over if to invest in Navteq, the market leader.
  8. Wow wish I saw this thread yersterday. NVT would have been a great trading opportunity today. 3 points and such a nice smooth chart.
  9. The following translated report was broadcasted by German Moneytalk Radio (http://www.deraktionaer.de/Interview.html) on October, 15th, 2004:

    stocks in focus: TeleAtlas

    The market for navigation applications is just at the beginning of its' development and promises high growth rates. Turnover is primarily generated by automotive navigation, which is growing steadily due to the one-digit market penetration rates. The highest potential is adjudged to mobile navigation applications for PDAs and cell phones. The portion of GPS-enabled cell phones is expected to raise to 50% during the next 3 to 4 years, so that mobile navigation is seen as new killer application. Companies like T-Mobile, TomTom and Wayfinder have already positioned themselves in this ermerging market. The big profiteers of this development are the providers of digital maps, which are unalterable for navigation. Leading in Europe is the Dutch company TeleAtlas. With a turnover growth of 47% to € 32,5 mio. and for the first time a positive operative result of € 1,51 mio. in this year's second quarter TeleAtlas gave a foretaste of what is to come for investors in the next years. After TeleAtlas has been working with high efforts on digitally mapping the major regions of the world in the last years, time has come to bring in the harvest. Now the map database demands only maintenance and updates, so that costs are shrinking and future profits are to grow disproportionately. Profit is expected to jump to € 0,30 per share in 2005. In 2006 profit should be at € 0,61 per share. At first view the stock appears expensive, due to a price-earnings ratio of 29 in 2005. But this should be regarded in relation to the price-earnings ratio of 14 for 2006. Further three-digit growth rates and the assessment of the only competitor Navteq should be considered. Navteq is assessed with a price-earnings ratio of 42 for 2005 and 33 for 2006.

    Based on price-turnover ratio and price-earnings ratio TeleAtlas is significantly cheaper than Navteq. The recent IPO of Navteq at the US-technology exchange Nasdaq and the high market value show, that navigation market is rated very high.
    Against this background two-digit stock rates of TeleAtlas are likely by this year. Our short term rate target is € 11. The stop-loss-limit should be set at € 5,90.

    TeleAtlas is traded at German XETRA market, Frankfurt stock exchange and futher German exchanges - symbol: TATL or 927101

    German-speaking users can listen to the report online: http://www.deraktionaer.de/Interview.phtml?current=1160621 (requires Real Player)
  10. Have a look at http://www.happyyuppie.com/cgi-bin/de/search.pl?isin=NL0000233948&typnr=4

    Allthough the page is in German, you should understand the following part:

    Datum Prognose (EUR) Änderung (%)
    20.Okt 2004 8.70
    19.Nov 2004 9.94 +14.25
    20.Dez 2004 11.37 +30.69
    20.Jan 2005 12.99 +49.31
    21.Feb 2005 14.85 +70.69
    21.Mär 2005 16.98 +95.17

    Also check this news:

    Isn't there anybody out there, who is interested in this topic?
    #10     Oct 20, 2004