Shares of GPS-device-maker Garmin Ltd. (GRMN) plunged as much as $12.70 yesterday (Wednesday) – extending a longer-term decline – after a Deutsche Bank AG (DB) analyst downgraded the shares, and warned that spiraling competition from rival TomTom NV may lead to a profit-crimping price war.

Analyst Jonathan Goldberg downgraded the stock to "Hold" from "Buy," while also slashing his target price from $125 to $90 per share. Based on conversations with Garmin and TomTom representatives at the current International Consumer Electronics Show, Goldberg said Garmin’s future is much less clear than it has been in recent years.

"TomTom management came across as being more aggressive about their plans in the U.S. this year, causing us to question the pricing discipline displayed so far," Goldberg told CNNMoney.com.

Garmin shares rallied late in the day to close at $75.99, down only $4.21 each, or 5.25% per share.

Although Garmin should continue to post solid results over the next several quarters, Goldberg said the company is reporting slower growth in some key European markets, such as Germany. And given the current atmosphere of uncertainty in the stock markets in general, there’s no way investors can justify paying the high multiple that sent the shares to such lofty levels last year, he said.

The bottom line: The stock deserves to remain at its current level for the moment, he said.

Back in early October, cell-phone giant Nokia Corp. (NOK) stunned the market – and Garmin investors – by announcing plans to buy the Chicago-based Navteq Corp. (NVT), a leading digital mapmaker, for about $8.1 billion. Navteq is the key supplier of the digital maps Garmin’s technology hides behind.
Faced with the potential loss of a key supplier, Garmin launched a hostile takeover bid for digital mapmaker Tele Atlas NV (TLATF), which TomTom already was working to buy. Finally, in November, TomTom trumped Garmin in a bidding battle for Tele Atlas – offering $4.2 billion, versus a $3.31 billion bid from Garmin. Tele Atlas was the last independent computerized-cartography company.

Garmin dropped its Tele Atlas bid and inked a long-term supplier contract with Navteq, but some analysts believe this leaves Garmin as a more-weakly positioned company. That thwarted takeover deal, coupled with market-share worries, has sent Garmin’s shares lower.
Garmin shares have traded between $48.46 and $125.68 in the last 12 months. 

News and Related Story Links:

• CNNMoney.com:
  Garmin Slips on Downgrade; Analyst Expects More U.S. Competition and Possible Price Cuts

• Bloomberg News:
  Garmin Withdraws Tele Atlas Bid, Ceding to TomTom

• Money Morning News Analysis:
  GPS Leader Garmin Weighs Counterstrike in Crucial Battle For Digital Mapmaker Tele Atlas; Settles Patent Dispute With Rival TomTom.

• Money Morning News Analysis:
  TomTom Bangs Out Higher Bid For Mapmaker Tele Atlas.

• Seattle Post-Intelligencer.com:
  Garmin, TomTom Settle Patent Disputes.

• International Business Times:
  Garmin Vs. TomTom: A Timeline of Litigation Over Tele Atlas

• Money Morning News Analysis:
  Garmin Takes 5% Stake in Tele Atlas, Company it is Pursuing in Hostile Bidding Battle

• Money Morning News:
  Garmin Beats Earnings Estimates, Launches $3.31 Billion Hostile Bid for Tele Atlas; Shares Plunge

• BusinessWeek:
  Tele Atlas Endorses $4.2B TomTom Bid.

Garmin Ltd. (GRMN), the largest U.S. maker of satellite-navigation devices, dropped its $3.4 billion bid for digital-mapmaker Tele Atlas NV (TLATF), handing victory in the strategic bidding battle to European rival TomTom NV.

The strategic reversal by Garmin could put the George Town, Grand Cayman Islands-based company "in play," with such companies as Microsoft Corp. (MSFT) and Google Inc. (GOOG) as two of the likeliest suitors.

Garmin may be forced to sell out because the lack of proprietary-mapmaking technologies is likely to leave it at a competitive disadvantage down the road to such rivals as TomTom and wireless-phone giant Nokia Corp., (NOK).

Garmin will have to keep licensing digital maps and related technologies, which may mean that its technology won’t be as comprehensive or up-to-date as TomTom’s offerings. Indeed, over the long haul, owning Tele Atlas  may provide Tom with a meaningful edge in the navigation-device market, which will rocket 20% to $10 billion this year, reports Canalys, an industry researcher based in the United Kingdom.

"The strategic disadvantage [it] will have will continue as an overhang" to Garmin’s long-term competitiveness, Rich Valera, an analyst with Needham & Co. in New York, told Bloomberg News. Even so, Valera advises investors to hold their Garmin shares.

To create the digital mapping technologies like those of Navteq and Tele Atlas – which encompass 12 million miles of roadway in 200 countries – would require a capital outlay of about $1 billion and would take as long as a decade, Jeff Rath, an analyst with Canaccord Adams, told Bloomberg.

That financial reality means that Garmin probably won’t try to simultaneously build a mapping division. And it also means that TomTom will be better positioned to beat back competitive assaults from the cellular phone sector, and will also generate additional revenue by licensing the mapping technology to other makers of wireless phone manufacturers and wireless-service providers.

"The most critical component to the device is the map," said Blair Swedeen, a principal with the San Francisco-based Partenza Consulting, which works with navigation-service companies. "This is really a move to become more of a service provider and have more ‘value-added’ than just the hardware."

Garmin on Friday withdrew its hostile bid for Tele Atlas after it was able to add another six years to its existing contract with mapmaker Navteq Corp., (NVT). The contract extension with Navteq also has an option for four additional years.

On Oct. 1, cell-phone giant Nokia Corp. (NOK) stunned the market – and Garmin investors – by announcing plans to buy the Chicago-based Navteq Corp. (NVT), a leading digital mapmaker, for about $8.1 billion.

That announcement seemed to stun Garmin and launch it into action – even though Nokia reassured investors that Navteq would continue to sell to Garmin, even after the buyout. Even so, Garmin went hunting for a mapping firm of its own, and ultimately launched the counterstrike against TomTom, which had already launched its initial $2.8 billion offer for Tele Atlas. Garmin upped the ante with the $3.31 billion bid, prompting TomTom to sweeten its offer to $4.2 billion, or $43.63 per share.

Analysts predicted that Garmin would make a counter-offer of more than $60 a share for Tele Atlas. But some analysts said Garmin faced a major challenge, given that TomTom had already amassed a 28% stake in Tele Atlas – to only about 5% for Garmin. Garmin had the capital to make the high offer, analysts say.

But the acquisition and integration on this deal would have diluted Garmin’s profit until 2010, American Technology Research analyst Rob Sanderson wrote in a Nov. 12 research note. Amsterdam-based TomTom, which already uses Tele Atlas more extensively, will absorb the company more easily, Sanderson wrote.

Nokia, the world’s biggest mobile-phone maker, will add Global Positioning System (GPS) technology to "dozens" of models by the end of next year. The Finland-based Nokia and other cell-phone firms will sell 162 million GPS-equipped phones this year, dwarfing the projected sales of 20 million GPS devices that Garmin and TomTom will sell in aggregate. Four years from now, a total of 444 million wireless phones – about one-third of the total produced – will be GPS-enabled, predicts iSuppli Corp., an El Segundo, Calif.-based industry researcher.

This could all combine to put Garmin at a massive competitive disadvantage, Rath, the Vancouver-based Canaccord Adams analyst, hypothesizes.
"The company that owns that map will have an ability to have a better product,” Rath said. "The company that [loses the bidding battle for Tele Atlas] will be forever in a strategic disadvantage.” Even so, he, too, advised investors to hold their Garmin shares.

Garmin’s shares soared to 97.51 Friday. "There’s [substantial] relief because the bidding had gone to a level that people didn’t like the earnings dilution,” Needham & Co.’s Valera said.

Here is a Timeline of Events involving Garmin, TomTom and Tele Atlas, according to both Money Morning the International Business Times:

• Garmin sues TomTom in federal courts in Texas and Wisconsin, claiming patent infringement.
• Garmin asks British and Dutch courts to invalidate TomTom’s registered designs and patents.
• TomTom counter-sues in Wisconsin, alleging Garmin infringed on its patents bought from California-based Horizon Navigation Inc.
• TomTom requests preliminary injunction against Garmin for reportedly copying one of its designs. Result: Denied.
• TomTom in July bids $2.8 billion for Tele Atlas.
• Nokia on Oct. 1 bids $8.1 billion for Navteq, the digital mapmaker Garmin uses for its digital mapmaking technology.
• Garmin bids $3.31 billion for Tele Atlas, and also takes a 5% stake in the target company.
• TomTom bids $4.2 billion for Tele Atlas, takes 28% stake in the target company.
• Companies settle patent disputes; Garmin weighs second counter-offer. Analysts expect it to go to $60 a share.
• Garmin withdraws from bidding battle for Tele Atlas; inks six-year contract extension of six years, with option for four additional years.

News and Related Story Links:

• Bloomberg News:
  Garmin Withdraws Tele Atlas Bid, Ceding to TomTom.

• Money Morning News Analysis:
  GPS Leader Garmin Weighs Counterstrike in Crucial Battle For Digital Mapmaker Tele Atlas; Settles Patent Dispute With Rival TomTom.

• Money Morning News Analysis:
  TomTom Bangs Out Higher Bid For Mapmaker Tele Atlas.

• Seattle Post-Intelligencer.com:
  Garmin, TomTom Settle Patent Disputes.

• International Business Times:
  Garmin Vs. TomTom: A Timeline of Litigation Over Tele Atlas.

• Money Morning News Analysis:
  Garmin Takes 5% Stake in Tele Atlas, Company it is Pursuing in Hostile Bidding Battle

• Money Morning News:
  Garmin Beats Earnings Estimates, Launches $3.31 Billion Hostile Bid for Tele Atlas; Shares Plunge

• BusinessWeek:
  Tele Atlas Endorses $4.2B TomTom Bid.

Garmin Ltd. (GRMN) yesterday (Thursday) said it is still reviewing its previously disclosed plans to make a cash offer to acquire digital mapmaker Tele Atlas NV (TLATF), which is also being pursued by Garmin’s European rival, TomTom NV.

TomTom currently has the upper hand. It recently boosted its existing offer or Tele Atlas by 41% to $4.2 billion – and in the process leapfrogged a competing, unsolicited $3.31 billion offer from Garmin, upping the ante in a significant way for the last independent computerized-cartography company.

In related news yesterday, Garmin disclosed that it had settled all intellectual-property litigation with TomTom, which includes lawsuits in Texas, Wisconsin, The Netherlands and the United Kingdom. However, neither company disclosed details of the settlements in question. And they have another battle to settle – this one a battle for control of Tele Atlas, which is based in The Netherlands.

In an interview with The Associated Press, Garmin spokesperson Jessica Myers confirmed the company is still reviewing its potential bid, which was detailed on Oct. 31. She also confirmed that news of a patent-dispute settlement with TomTom is unrelated to its Tele Atlas plans.

Garmin is based in the Grand Cayman Islands, but has its operational headquarters in Olathe, Kan. It makes navigation products that utilize global-positioning-system (GPS) technology for automobiles, boats, aircraft, and for recreational uses such as camping and hiking. It’s the U.S. market leader. TomTom, based in Amsterdam, is the European leader.

Garmin sued TomTom in U.S. District Court in both Texas and Wisconsin, claiming TomTom had infringed on Garmin patents. And Garmin asked courts in the Netherlands and United Kingdom to invalidate both lawsuits, the Seattle Post-Intelligencer reported.

A year ago, Garmin won the first round when a court in The Hague, Netherlands, refused TomTom’s request for a preliminary injunction against Garmin for allegedly copying a European registered design it owned.

On Oct. 1, cell-phone giant Nokia Corp. (NOK) stunned the market – and Garmin investors – by announcing plans to buy the Chicago-based Navteq Corp. (NVT), a leading digital mapmaker, for about $8.1 billion.

Navteq is the key supplier of the digital maps Garmin’s technology hides behind.
The proposed deal at $78 a share would be Finland-based Nokia’s biggest purchase, and follow Nokia’s acquisition of mobile-advertiser Enpocket.

Initially, analysts viewed the Navteq purchase as a shot-across-the bow of Apple Inc., (AAPL), whose new and much-hyped iPhone comes equipped with mapping and navigation provided by Google Inc. (GOOG). But it also put an immense amount of pressure on Garmin, whose shares were pounded by investors who believed the Nokia-Navteq marriage would hamstring the fast-growing GPS maker.

Investors were exceptionally disappointed that Garmin didn’t strike first, and didn’t even try to turn the bidding for Navteq into a two-horse race.

Navteq provides digital map information for automobile navigation systems, mobile phones and devices and Web sites. Navteq also owns Traffic.com, an interactive Web site that gives users up-to-the-minute traffic information in their area. Navteq generated revenue of $582 million last year, Nokia said.

The deal won’t be completed until next year. But the agreement was still enough to spook Garmin shareholders: Within days of the announced Nokia-Navteq tie-up, Garmin’s shares – which had reached a new high of $122.78 – had plunged by more than $26 each, and were trading at less than $97.

The shares subsequently rebounded and raced to new highs, reaching a record at $125.68.

Garmin’s shares have been pounded since the TomTom counter bid materialized, and have declined more than $40 each – about 33% – from that record peak.

Analysts have speculated openly that such heavyweights as Microsoft Corp. (MSFT) and Google Inc. (GOOG) may enter the bidding fray – either for the mapmakers, or for the GPS producers themselves.

Nokia has reassured investors that Navteq would continue to sell to Garmin, even after the buyout. Even so, Garmin went out hunting for a mapping firm of its own, and ultimately launched the counterstrike against TomTom, which had already launched its initial $2.8 billion offer for Tele Atlas. Garmin upped the ante with the $3.31 billion bid, prompting TomTom to sweeten its offer to $4.2 billion, or $43.63 per share.

Shares of Garmin jumped earlier this week on speculation it might make a counter-offer of more than $60 a share for Tele Atlas. However, some securities analysts have concluded that Garmin faces an uphill battle, since TomTom already has amassed a 28% stake in Tele Atlas.

Garmin’s shares closed yesterday at $84, down $1.60 a share, or 1.87%.

Here is a Timeline of Events involving Garmin, TomTom and Tele Atlas, according to the International Business Times:

• Garmin sues TomTom in federal courts in Texas and Wisconsin, claiming patent infringement.
• Garmin asks British and Dutch courts to invalidate TomTom’s registered designs and patents.
• TomTom counter-sues in Wisconsin, alleging Garmin infringed on its patents bought from California-based Horizon Navigation Inc.
• TomTom requests preliminary injunction against Garmin for reportedly copying one of its designs. Result: Denied.
• TomTom bids $2.8 billion for Tele Atlas.
• Garmin bids $3.31 billion for Tele Atlas, and also takes a 5% stake in the target company.
• TomTom bids $4.2 billion for Tele Atlas, takes 28% stake in the target company.
• Companies settle patent disputes; Garmin weighs second counter-offer.

News and Related Story Links:

• Money Morning News Analysis:
  TomTom Bangs Out Higher Bid For Mapmaker Tele Atlas.

• Seattle Post-Intelligencer.com:
  Garmin, TomTom Settle Patent Disputes.

• International Business Times:
  Garmin Vs. TomTom: A Timeline of Litigation Over Tele Atlas.

• Money Morning News Analysis:
  Garmin Takes 5% Stake in Tele Atlas, Company it is Pursuing in Hostile Bidding Battle

• Money Morning News:
  Garmin Beats Earnings Estimates, Launches $3.31 Billion Hostile Bid for Tele Atlas; Shares Plunge

• BusinessWeek:
  Tele Atlas Endorses $4.2B TomTom Bid.

• CNNMoney.com:
  Garmin Continues to Review Tele Atlas Bid; TomTom Settlement Unrelated to Offer.

TomTom NV, Europe’s largest maker of navigation devices used in automobiles, has boosted its bid for digital-mapping company Tele Atlas NV (TLATF) by 41% to $4.2 billion, leapfrogging a competing $3.31 billion offer from Garmin Ltd. (GRMN), and significantly upping the ante in the bidding battle for the last independent computerized-cartography company.

TomTom will pay about $44 a share (30 euros) for Tele Atlas – starting with a 28% stake it will acquire from institutional investors, TomTom said in a statement yesterday (Thursday). Garmin had offered about $36.96 (24.50 euros) a share last week after TomTom bid $31.20 (21.25 euros) on July 23. Garmin also took a 5.02% stake in the Dutch mapmaker – a move intended to give it the tactical high ground, should bidding escalate.
And it likely will, according to a fund manager who holds shares of both TomTom and Tele Atlas.

"This is meant to be a knockout bid,” Michiel Plakman, who oversees about $8.8 billion for Robeco in The Netherlands, told Bloomberg News. "The share price suggests people see a chance for Garmin to top this bid. I also believe they will, simply because they can, given their market cap and cash position.”

Garmin, based in George Town, the Cayman Islands, and the Amsterdam-based TomTom are the two dominant players in the market for navigation devices, which include the satellite-directed global-positioning systems (GPS) motorists are using at an increasing rate. TomTom is the largest maker of automotive navigation devices, while Garmin is larger in the U.S. market, and overall.

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Sales of handheld GPS devices also are soaring, as hobbyists, hikers, sportsmen and hunters flock to the market.

But the digital maps that put user-friendly face on the technology are key. And that pits Garmin against TomTom for the 12 million miles of roadways in 200 countries mapped by Tele Atlas, based in Den Bosch, The Netherlands. Tele Atlas, the world’s Number Two producer of digital maps, has been losing money for a decade.

But the events of last month increased the company’s value, many times over.

On Oct. 1, cell-phone giant Nokia Corp. (NOK) stunned the market – and Garmin investors – by announcing plans to buy the Chicago-based Navteq Corp. (NVT), a leading digital mapmaker, for about $8.1 billion.

Navteq is the key supplier of the digital maps Garmin’s technology hides behind.

The proposed deal at $78 a share would be Finland-based Nokia’s biggest purchase, and followed Nokia’s acquisition of mobile-advertiser Enpocket. Initially, analysts viewed the Navteq purchase as a shot-across-the bow of Apple Inc., (AAPL), whose new and much-hyped iPhone comes equipped with mapping and navigation provided by Google Inc. (GOOG). But it also put an immense amount of pressure on Garmin, whose shares were pounded by investors who believed the Nokia-Navteq marriage would hamstring the fast-growing GPS maker. Investors were exceptionally disappointed that Garmin didn’t strike first, and didn’t even try to turn the bidding for Navteq into a two-horse race.

Navteq provides digital map information for automobile navigation systems, mobile phones and devices and Web sites. Navteq also owns Traffic.com, an interactive Web site that gives users up-to-the-minute traffic information in their area. Navteq generated revenue of $582 million last year, Nokia said.

"Location-based services are one of the cornerstones of Nokia’s Internet services strategy. The acquisition of NAVTEQ is another step toward Nokia becoming a leading player in this space," Olli-Pekka Kallasvuo, Nokia’s president and chief executive, said when the deal was announced.
"By joining forces with Navteq, we will be able to bring context and geographical information to a number of our Internet services with accelerated time to market. We also look forward to maintaining and enhancing the services and support provided to Navteq’s existing and future customers."

The deal won’t be completed until next year. But the agreement was enough to spook Garmin shareholders: Within days of the announced Nokia-Navteq tie-up, Garmin’s shares – which had reached a new high of $122.78 – had plunged by more than $26 each, and were trading at less than $97.

The shares subsequently rebounded and raced to new highs, reaching a record at $125.68.

Garmin’s shares have been pounded since the TomTom counter bid materialized, and have declined $40 each – or 32% – from that record peak. The shares skidded $3.67 each, or 4.11%, yesterday to close at $85.68.

Analysts have speculated openly that such heavyweights as Microsoft Corp. (MSFT) and Google Inc. (GOOG) may enter the bidding fray – either for the mapmakers, or for the GPS producers themselves.

Nokia has reassured investors that Navteq would continue to sell to Garmin, even after the buyout. Even so, Garmin went out hunting for a mapping firm of its own, and ultimately launched the counterstrike against TomTom for Tele Atlas.

In a telephone interview with Bloomberg yesterday, TomTom CEO Harold Goddijn said he spoke with Tele Atlas CEO Alain De Taeye. De Taeye was pleased by the boosted bid and said there was "no reason to assume" Tele Atlas will withdraw its support for TomTom’s bid, Goddijn said.
In a statement, Tele Atlas said it would review TomTom’s new bid and "inform the market on further steps as soon as reasonably possible.”
As for Garmin? In a telephone interview, spokesman Ted Gartner told a reporter that the industry leader is reviewing the offer – as well as "possible responses," declining to elaborate further.

News and Related Story Links:

• Money Morning:
  Garmin Takes 5% Stake in Tele Atlas, Company it is Pursuing in Hostile Bidding Battle

• Money Morning:
  Garmin Beats Earnings Estimates, Launches $3.31 Billion Hostile Bid for Tele Atlas; Shares Plunge

• BusinessWeek:
  Tele Atlas Endorses $4.2B TomTom Bid.

Shares of Garmin Ltd. (GRMN), the biggest U.S. maker of portable navigation devices, jumped by nearly 4.6% yesterday (Monday) on speculation that it is a buyout target of Microsoft Corp. (MSFT) – and after an analyst boosted his rating on the stock.

Garmin’s shares closed yesterday at $108.46, a jump of 4.58%, or $4.75 per share. Though the shares have rebounded after being savaged last week, they remain $14.32 per share, or nearly 12%, below their 52-week high of $122.78.

"There’s speculation of Microsoft [being on the prowl] for Garmin,” Greg Palmer, head of equity trading at Pacific Crest Securities Inc. in Portland, Oregon, told Bloomberg News.

Stating that Garmin doesn’t comment on market speculation, spokesman Ted Gartner said the company would have no comment. Microsoft officials could not be reached for comment.

Garmin makes portable Global Positioning System (GPS) devices, including some models that retail for roughly $100, and which are used by hikers, travelers and hobbyists. The low-cost nature of the devices has even touched off a new global game called "geocaching," which is a combination treasure hunt, auto rally, high-tech exploration opportunity. Garmin is the market leader in all those categories, and in the production of automobile GPS systems, which has made it a Wall Street darling.

But Garmin shares fell by as much as 9.6% on Oct. 2 after American Technology Research analyst Rob Sanderson said the George Town, Grand Cayman-based company was "vulnerable" to competition from Nokia Corp. (NOK), the world’s biggest mobile-phone company. Nokia agreed Oct. 1 to buy Navteq Corp. (NVT) for $8.1 billion to gain digital maps of 69 countries and compete with TomTom NV in the market for navigation devices. Analysts said the deal left Garmin at a huge competitive disadvantage. Within days, however, Garmin had unveiled a $99 software package that turned "smart phones" into low-level navigation devices.

Sanderson yesterday actually took the step of upgrading Garmin to "neutral” from "sell,” writing in a note to investors that competition from Nokia is unlikely to hurt Garmin through 2008.

Indeed, he even said that the stock is potentially attractive now, after dropping 19% in the three days following Nokia’s announcement. Sanderson also wrote that Garmin may exceed analyst estimates when it reports third-quarter results on Oct. 31.

News and Related Story Links:

• Bloomberg News:
  Garmin Climbs on Speculation Microsoft Will Buy It.

• Money Morning News Analysis:
  Savaged Garmin Battles Back With Cell Phone Navigation Software.

• Forbes.com:
  
  Garmin Rebounds.

• Money Morning News:
  Nokia Announces $8.1 Billion Acquisition of Navteq.

• Information Week:
  Garmin’s New Device Turns Smart Phones into GPS Devices.

• Wikipedia:
  Geocaching.

• Geocaching.com:
  The Official Global GPS Geocaching Cache Hunt Site.

• Garmin:
  Geocaching Garmin Style.

In one of those ultimate business ironies, just days after its shares were pounded by investors over fears it would flounder because of competition from "smart" cell phones, GPS-maker Garmin Ltd. (GRMN) yesterday (Wednesday) introduced a $99 software package that turns "smart" wireless phones into high-end navigation units.

The shares of the Olathe, Kansas-based Garmin have fallen by more than 20% this week because cell-phone giant Nokia Corp. (NOK) on Monday announced it was buying digital mapmaker Navteq (NVT) in a deal valued at $8.1 billion. The Navteq purchase is a clear shot at Apple Inc. (AAPL), whose iPhone comes equipped with mapping and navigation provided by Google Inc. (GOOG). It also puts pressure on GPS-system-maker Garmin: Investors were clearly disappointed that Garmin wasn’t a bidder for Navteq, and are apparently also concerned that the buyout by the world’s No. 1 cell-phone maker will leave the once-high-flying Garmin at a huge competitive disadvantage.

Garmin is one of the industry’s top producers of portable global positioning system (GPS) units, including several that received No. 1 ratings from such publications as Consumer Reports. But Garmin’s shares are now down more than $26 from their recently achieved 52-week high of $122.78. Navteq provides digital map information for automobile navigation systems, mobile phones and devices and Web sites. Navteq also owns Traffic.com, an interactive Web site that gives users up-to-the-minute traffic information in their area. Last year, Navteq booked revenue of $582 million, according to a Nokia’s press release announcing the Navteq buyout.

Some investors believe that Garmin will make a counteroffer for Navteq. And still others say that Garmin has long-term contracts with Navteq, meaning that even as part of Nokia the digital map firm won’t be able to "freeze out" and cease dealing with Garmin.

And then yesterday, Garmin unveiled Garmin Mobile XT, a unique, all-in-one software solution that turns select smart phones with internal global positioning systems (GPS) into high-end Garmin navigation units. The "Plug-N-Play" mobile phone application software is said to blend in seamlessly with the phone’s built-in GPS unit, providing users with navigation capabilities anywhere in North America or Europe, the company said. Once installed, consumers have access to pre-loaded maps, and premium data such as fuel-price and real-time traffic alerts.

"It’s a one-time investment that gives customers full-featured GPS navigation on their smart phone whenever and wherever they need it, including areas outside of wireless network coverage," Charles Morse, Garmin’s director of mobile marketing, told journalists.

News and Related Story Links:

• Money Morning News:
  Nokia Announces $8.1 Billion Acquisition of Navteq.

• Information Week:
  Garmin’s New Device Turns Smart Phones into GPS Devices.

Nokia Corporation (NOK), the largest cell phone maker in the world, announced yesterday (Monday) that it plans to buy Chicago-based Navteq (NVT), a leading digital mapmaker, for about $8.1 billion.

The proposed deal at $78 a share would be Finland-based Nokia’s biggest purchase, and it follows the heels of Nokia’s acquisition of mobile-advertiser Enpocket. The Navteq purchase is a clear shot at Apple Inc. (AAPL), whose iPhone comes equipped with mapping and navigation provided by Google Inc. (GOOG). It also puts pressure on GPS-system-maker Garmin Ltd. (GRMN), the high-flier whose shares were pounded by investors who were disappointed it wasn’t a bidder for Navteq.

Navteq provides digital map information for automobile navigation systems, mobile phones and devices and Web sites. It also owns Traffic.com, an interactive Web site that gives users up-to-the-minute traffic information in their area. Last year, the company pocketed revenues of $582 million, according to Nokia’s press release.

"Location-based services are one of the cornerstones of Nokia’s Internet services strategy. The acquisition of NAVTEQ is another step toward Nokia becoming a leading player in this space," Olli-Pekka Kallasvuo, Nokia’s president and CEO said in a statement. "By joining forces with Navteq, we will be able to bring context and geographical information to a number of our Internet services with accelerated time to market. We also look forward to maintaining and enhancing the services and support provided to Navteq’s existing and future customers."

The deal has yet to be approved by U.S. regulators and Navteq shareholders. It isn’t expected to be finalized until early 2008.