TeleNav 2015 Annual Report Download - page 46

Table of Contents
The following discussion and analysis should be read together with our consolidated financial statements and the notes to those statements
included elsewhere in this Form 10-K. This discussion contains forward-looking statements based on our 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
Telenav is a leading provider of location-based platform services. These services consist of our automotive and mobile navigation platform
and our advertising delivery platform. Our auto and mobile navigation platform allows Telenav to deliver enhanced location-based services to
auto manufacturers, developers, and end users through various distribution channels, including wireless carriers. Our advertising delivery
platform delivers highly targeted advertising services leveraging our location expertise. We report operating results in three business segments:
automotive, advertising and mobile navigation.
For our automotive segment customers, we offer our auto and mobile navigation platform services to vehicle manufacturers and original
equipment manufacturers, or OEMs, for distribution with their vehicles. Our primary automotive customer to date, Ford, currently distributes our
on-board product as an optional feature with all of its models in the U.S. Our automotive products are now included on models manufactured in
the U.S., Canada, Mexico, Europe and China, as well as offered in models in South America, Australia and New Zealand. In January 2014 we
entered into an agreement with GM for integration of our on-
board and connected navigation solutions in its vehicles, which we expect to launch
in model year 2017. Our relationship with GM also includes brought-in services for vehicles, and in January 2015 GM launched the new version
of its OnStar RemoteLink® mobile application powered by our location-based services platform, which includes mapping and one-box search.
In July 2015, we and Toyota announced a partnership for brought-in navigation services where our Scout GPS Link will be available first in the
model year 2016 Toyota Tacoma, and subsequently in other Entune™ Audio Plus equipped model year 2016 Toyota vehicles in the United
States. We believe our history as a supplier of cloud-based navigation services provides a unique advantage in the automotive navigation
marketplace over our competitors.
For our advertising segment customers, we believe our advertising delivery platform offers 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 believe we offer unique value to brick-and-mortar and brand advertisers through our location targeting
capabilities. Our technology focuses on managing the complexity and scale associated with mobile location data to deliver better mobile
campaigns for our advertising partners. We deliver mobile advertisements by leveraging our proprietary in-house ad serving technology. Our
inventory, or accessible market, is comprised of thousands of mobile applications and mobile websites that are accessed through programmatic
real-time bidding, or RTB, tools.
We derive revenue from automobile manufacturers and OEMs, advertisers and advertising agencies, and wireless carriers. We receive
revenue from automobile manufacturers whose vehicles contain our proprietary software and are able to access our personalized navigation
services. These manufacturers have typically not provided us with any volume or revenue guarantees. In addition, we have a growing business in
mobile advertising where our customers are primarily advertising agencies, which represent national and regional brands, and channel partners,
which work closely with local and small business advertisers. We also derive revenue from our partnerships with wireless carriers, who pay us to
enable their subscribers to use our mobile navigation services. Some of these wireless carriers bill their subscribers on a monthly recurring basis
and the number of those monthly recurring subscribers to which we provide services continues to decline, resulting in substantial declines in our
revenue from wireless carriers.
We generate revenue from the delivery of customized software and royalties from the distribution of this customized software in
automotive navigation applications. For example, Ford utilizes our on-board automotive navigation product in its Ford SYNC platform. 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. In addition, we earn a one-time royalty for each new vehicle owner who downloads the GM OnStar RemoteLink®
application, whereby we provide enhanced search capabilities for contracted service periods.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS