TeleNav 2012 Annual Report Download - page 44

Table of Contents
current expectations, assumptions, estimates and projections about Telenav and our industry. These forward-looking statements involve risks and
uncertainties. Our actual results could differ materially from those indicated in these forward-looking statements as a result of certain factors, as
more fully described in “Risk factors” in Item 1A of this Form 10-K, Management’s Discussion and Analysis of Financial Condition and Results of
Operations and elsewhere in this Form 10-K. We undertake no obligation to update publicly any forward-looking statements for any reason, even if
new information becomes available or other events occur in the future.
Overview
Our mission is to make people's lives less stressful, more productive, and more fun when they are on the go.
We are a leader in personalized mobile navigation. We help on the go people by creating products that (1) provide easily-accessed, relevant,
and personalized information for discovery, traffic, maps, local search, and navigation and (2) are available across multiple platforms and devices,
including mobile phones, tablets, computers and cars. With millions of users able to access Telenav services while on the go today, we believe that
we are well positioned to capitalize on growing location services market opportunities, especially as related to connected cars and mobile advertising.
We offer our mobile navigation services to customers in a number of ways. We distribute our services through our wireless carrier partners,
including AT&T Mobility, and directly to consumers through mobile application stores and marketplaces. Generally, we provide our basic services to
consumers for free and provide consumers the opportunity to purchase premium versions of the product. We refer to the free to premium distribution
as the “freemium” model of distribution. Our free products are designed to be monetized through delivery of advertising to consumers. Our success
with the freemium model depends upon our ability to generate a substantial active user base as well as the ability to generate revenues from
advertising and conversion of users from free to premium services.
We offer our automotive navigation services to auto manufacturers and OEMs, for distribution with their vehicles. Our primary customer to
date, Ford, currently distributes our product as an optional feature with the majority of its models in the U.S., Mexico, South America and China. We
also have relationships with automotive OEMs that distribute our products with other major auto manufacturers. Our automotive solutions are
typically a self-contained service along with the related software and content within the car, or on-board, and are often enhanced through connection
to data services for additional real time capabilities such as traffic. Our history as a cloud based supplier of navigation services provides a unique
advantage in the marketplace over our competitors.
Our advertising network services offer advertisers significant audience reach, sophisticated targeting capabilities and the ability to deliver
interactive and engaging ad experiences to consumers on their mobile devices. We are experts in location based advertising and offer unique value to
brick-and-mortar and brand advertisers with our location targeting capabilities. We do this by accessing a large universe of impressions, and filtering
out those that are tagged with accurate, real-time and historical location information. We filter out these impressions using a wide range of
sophisticated proprietary techniques. In June 2013, our platform accessed approximately 9 billion potential ad impressions.
We derive revenue from wireless carriers and end users, automobile manufacturers and OEMs, and mobile advertisers and advertising agencies.
We primarily derive our revenue from automobile manufacturers whose vehicles contain our proprietary software and are able to access our
navigation services. We also derive revenue from our partnerships with wireless carriers who sell our mobile navigation services to their subscribers.
In addition, we have a growing business in mobile advertising where our customers are primarily advertising agencies that represent national and
regional brick-and-mortar brands and channel partners that work closely with local and small business advertisers.
We generate revenue from the delivery of customized software and royalties from the distribution of customized software in automotive
navigation applications. For example, Ford utilizes our on-board automotive navigation product in its Ford SYNC platform, which includes MyFord
Touch and MyLincoln Touch. Ford began shipping this product in certain North American vehicles with the 2011 model year, and our navigation
solution is currently deployed in 15 different Ford and Lincoln models. Ford and Lincoln models with our on-board automotive navigation product
began shipping to South America with the 2012 model year and China with the 2013 model year. Our automobile manufacturer and OEM customers
pay us a royalty fee as the software is reproduced for installation in vehicles with our automotive navigation solutions.
We generate revenue from mobile navigation services through service subscriptions, including premium offerings, and fixed fee arrangements.
End users with subscriptions for our services are generally billed for our services through their wireless carrier or through application stores. Our
wireless carrier customers pay us based on several different revenue models, including (1) a revenue sharing arrangement that may include a
minimum fee per end user, (2) a fixed annual fee for any
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