TeleNav 2012 Annual Report Download - page 6

Table of Contents
PART I.
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 LLC, or AT&T, 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 original equipment manufacturers, or OEMs, for distribution with their
vehicles. Our primary customer to date, Ford Motor Company, or 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.
We also offer to advertisers mobile advertising network services with 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 through 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 had access to over 9 billion location-enabled 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 Motor Company, or 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.
We generate revenue from mobile navigation services through service subscriptions, including premium offerings, and fixed fee service
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 number of subscribers (up to specified thresholds) receiving our services as part of
bundles with other voice and data services, (3) a monthly or annual subscription fee per end user, or (4) based on usage.
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ITEM 1. BUSINESS