TeleNav 2011 Annual Report Download - page 17

Table of Contents
we use to provide our services for Sprint’s bundled offerings. Pursuant to the amended agreement, we will pay TomTom Maps a percentage of
fees we collect from Sprint for basic navigation services and our gross advertising and mobile commerce revenue and a flat monthly fee per
subscriber for premium navigation services. We also agreed to pay TomTom Maps certain guaranteed minimum payments for such services. The
expiration of the license period for navigation services provided for Sprint’s bundled offerings has been changed from July 1, 2014 to the earlier
of December 31, 2012 or termination of our agreement with Sprint with respect to the those bundled services. We also obtain map data from
Navigation Technologies Corporation, or NAVTEQ, pursuant to an agreement dated December 1, 2002. Our agreement with NAVTEQ had an
initial term of one year which has been extended until January 31, 2012 and will automatically renew for successive one year periods thereafter
unless either party provides written notice of termination at least 180 days prior to the expiration of the then current term. Our agreements with
TomTom Maps and NAVTEQ also allow a party to terminate the agreement if the other party materially breaches its obligations and fails to cure
such breach. In addition, we obtain other data such as weather updates, gas prices, POI and traffic information from additional providers.
Competition
The market for development, distribution and sale of LBS is highly competitive. Many of our competitors have greater name recognition,
larger customer bases and significantly greater financial, technical, marketing, public relations, sales, distribution and other resources than we
do.
Competitors are offering LBS navigation services that have similar functionality to ours for free. For example, Google offers free voice
guided, turn by turn navigation as part of its release of Google Maps Navigation for mobile devices based on the Android 1.6 and higher
operating system platform and Nokia provides a download for its latest version of Nokia Maps on its smartphones which also provides turn by
turn navigation functions. Microsoft also provides a free turn by turn navigation solution with its Windows Mobile operating system.
Competition from these free offerings may reduce our revenue and harm our business. If our wireless carrier customers can offer these LBS to
their subscribers for free, they may elect to cease their relationships with us, alter or reduce the manner or extent to which they market or offer
our services or require us to substantially reduce our subscription fees or pursue other business strategies that may not prove successful.
We compete in the LBS market and our primary competitors include providers of LBS such as Google, Microsoft, Navigon AG, or
Navigon, Nokia, TeleCommunication Systems, or TCS, through its acquisition of Networks in Motion, or NIM, Telmap Ltd., or Telmap, and
TomTom Maps; PND providers such as Garmin Ltd., or Garmin, and TomTom Maps; integrated navigation mobile phone providers such as
Garmin and Nokia; providers of Internet and mobile based maps and directions such as AOL Corporation, or AOL, Mapquest, Inc., or Mapquest,
Google, Microsoft and Yahoo!, Inc., or Yahoo.
We compete in the automotive navigation market with established automobile manufacturers and OEMs and providers of on-board
navigation services such as Bosch, Garmin, TomTom Maps and NNG, or Nav N Go, as well as other competitors such as Google, Microsoft and
TCS.
Competition in our market is based primarily on product performance which includes features, functions, reliability, flexibility, scalability
and interoperability; wireless carrier relationships; technological expertise, capabilities and innovation; price of services and products and total
cost of ownership; brand recognition; and size and financial stability of operations. We believe we compete favorably with respect to these
factors based upon the performance, reliability and breadth of our services and products and our technical experience.
Some of our competitors and potential competitors enjoy advantages over us, either globally or in particular geographic markets, including
with respect to the following:
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significantly greater revenue and financial resources;
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stronger brand and consumer recognition in a particular market segment, geographic region or worldwide;