TeleNav 2011 Annual Report Download - page 53

Table of Contents
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, or (4) based on usage or other basis. Certain of our contracts provide
our wireless carrier customers with discounts based on the number of end users paying for our services in a given month. In general, our wireless
carrier customers pay us a lower monthly fee per end user if an end user subscribes to our LBS as part of a bundle of mobile data or voice
services than if an end user subscribes to our LBS on a standalone basis. We also offer our applications directly to end users through application
stores such as Apple’s or Google’s Android. In addition, we derive revenue from the delivery of customized software and royalties from the
distribution of this customized software in certain automotive navigation applications. In the future, we may have other revenue models. For
example, we recently implemented revenue models, including fees for advertising supported arrangements, and versions of our services that
allow for upgrades to more premium versions for a fee.
Our wireless carrier customers are responsible for billing and collecting the fees they charge their subscribers for the right to use our LBS.
When we are paid on a revenue sharing basis with our wireless carrier customers, the amount we receive varies depending on several factors,
including the revenue share rate negotiated with the wireless carrier customer, the price charged to the subscriber by the wireless carrier
customer, the specific sales channel of the wireless carrier customer in which the service is offered and the features and capability of the service.
As a result of these factors, the amount we receive for any subscriber may vary considerably, and is subject to change over time.
In addition, the amount we are paid per end user may also vary depending upon the metric used to determine the amount of the payment,
including the number of end users at any time during a month, the average monthly paying end users, the number and timing of end user billing
cycles and end user activity. Although our wireless carrier customers generally have sole discretion about how to price our LBS to their
subscribers, our revenue sharing arrangements generally include monthly minimum fees per end user. To a much lesser extent, we also sell our
services directly to consumers through our website and through application stores.
Subscription fees from our wireless carrier customers represented a substantial majority of our revenue for fiscal 2011. In fiscal 2011,
Sprint and AT&T represented 42% and 37% of our revenue, respectively. Subscription fees from our GPS Navigator service represented 94%
and 88% of our revenue in fiscal 2010 and 2011, respectively. Revenue from our automotive navigation solutions, enterprise LBS (sometimes
referred to as MRM), mobile advertising and commerce and premium LBS represented 6% and 13% of our revenue in fiscal 2010 and 2011,
respectively. GPS Navigator is our flagship voice guided real time, turn by turn, mobile navigation service. Our technology also powers
automotive navigation services that provide accurate, easy to use LBS to drivers, including search, POI and traffic functionality. Our enterprise
LBS solutions allow enterprises to monitor and manage mobile workforces and assets by using our LBS platform to track job status and the
location of workers, field assets and equipment. We are developing other LBS solutions with new business models and distribution channels in
our current LBS market and adjacent markets. These solutions include tablet devices, location based mobile advertising and commerce services
and premium LBS. While we have already introduced certain components or initial versions of several of these LBS solutions, the scope and
timing of broader and more commercially viable offerings is uncertain. The ultimate scope and timing of any future releases are dependent on
many factors, including adoption by wireless carrier customers and automobile manufacturers and OEMs of the LBS solutions; end user
adoption and preferences; the quality, features and timing of our product offerings; the impact of competition; and market acceptance of mobile
advertising and social networking. See the section entitled “Business—Our services and products”
for additional information relating to our GPS
Navigator, on
-board navigation, enterprise LBS and other LBS solutions. We believe our cash, cash equivalents and short-term investments and
anticipated cash flows from operations will be sufficient to cover the costs of these development efforts.
In fiscal 2010 and 2011, we generated 97% and 96% of our revenue, respectively, in the United States. In absolute dollars, revenue from
our international operations increased in fiscal 2011. We are pursuing expansion opportunities with wireless carriers in other countries and
therefore expect international revenue to increase in absolute dollars over the longer term.
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