TeleNav 2010 Annual Report Download - page 4

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PART I
ITEM 1. BUSINESS
Overview
We are a leading provider of location based services, or LBS, including voice guided navigation, on mobile
phones. Our LBS solutions provide consumers and enterprises with convenient and easy to use location specific,
real time and personalized features and functions. By using an integral tool of their daily lives, their mobile
phone, our end users can access our LBS almost anytime and anywhere to efficiently navigate to their
destinations and easily obtain relevant local information. Through our hosted service delivery model, we provide
our solutions through the networks of leading wireless carriers in the United States, including Sprint Nextel
Corporation, or Sprint, and AT&T Inc., or AT&T, as well as through certain carriers in other countries. Our
flexible and proprietary LBS platform enables us to efficiently provide our LBS to millions of end users, across
more than 500 types of mobile phones, all major mobile phone operating systems and a broad range of wireless
network protocols. In the three months ended June 30, 2010, we had a monthly average of 16.1 million paying
end users, who represented less than seven percent of our U.S. wireless carrier partners’ total subscribers.
Our core LBS solution is GPS Navigator, our industry leading voice guided, real time, turn by turn mobile
navigation service, which offers many innovative features such as real time traffic alerts, route planning and
updated points of interest, or POIs. We leverage our LBS platform to provide easy to implement and cost
effective Mobile Resource Management, or MRM, solutions for enterprises. We are also using our LBS platform
to develop new offerings such as a feature rich, in-dash navigation solution for automotive consumers.
Additionally, we are broadening the scope of our LBS platform by developing solutions that support a broad
range of location enhanced applications such as location based mobile advertising, commerce and social
networking.
We receive revenue from our wireless carrier partners in three ways: (1) a monthly subscription fee per end
user, (2) commencing in fiscal 2011, a fixed annual fee for any number of subscribers (up to specified thresholds)
receiving our services as part of bundles with other voice and data services or (3) a revenue sharing arrangement
that may include a minimum fee per end user. Our wireless carrier partners may offer our services on a stand
alone basis or bundled with other voice and data services. In the future, we may have other revenue models,
including fees for certain automotive navigation applications or advertising supported arrangements. Our flexible
LBS platform and hosted delivery model enable our wireless carrier partners to leverage our infrastructure,
expertise and resources to deploy customized LBS offerings, which allow them to attract and retain subscribers
and increase data revenue. Due to our established and deep relationships with our wireless carrier and mobile
phone manufacturer partners, our client software is generally preloaded on new mobile phones prior to
commercial launch, making it easy for end users to discover and activate our LBS.
In September 2010, we entered into an amendment to our agreement with our largest customer, Sprint,
which changed the way in which we receive revenue from the majority of the services we provide to Sprint’s
subscribers. In connection with this amendment, we also entered into an amendment to our agreement with one
of our providers of map and POI data to align the manner in which we pay for that data with our Sprint bundled
service model. The Sprint amendment represents a material change to our relationship with Sprint that we
anticipate will negatively affect our revenue from Sprint in the short term, although we believe certain of the
changes to our relationship will provide us with additional revenue opportunities over time.
Our fiscal year ends June 30. In this Form 10-K, we refer to the fiscal year ended June 30, 2008, 2009 and
2010 as fiscal 2008, fiscal 2009 and fiscal 2010, respectively. Our total revenue grew from $48.1 million in fiscal
2008 to $110.9 million in fiscal 2009 and to $171.2 million in fiscal 2010. Our net income also increased from
$4.6 million in fiscal 2008 to $29.6 million in fiscal 2009 and to $41.4 million in fiscal 2010.
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