Microsoft and Google muscle into mapping

Microsoft and Google are set to battle it out in the race to buy map intellectual property, analysts predicted today.

ISuppli said that the combined TomTom/Tele Atlas is a likely acquisition target for Microsoft or Google.

The analyst firm believes that Google has a greater motivation to buy TomTom/Tele Atlas than Microsoft because of its desire to offer mobile location-based services.

"Speculation has arisen that Microsoft is considering a purchase of Garmin," said Richard Robinson, principal analyst for automotive electronics at iSuppli.

"ISuppli considers this to be less likely than Microsoft buying TomTom/Tele Atlas because the key item in the supply chain is the map intellectual property rather than the navigation devices themselves."

The analyst firm noted that Navteq and Tele Atlas (which is being bought by TomTom) are the two remaining major map intellectual property suppliers with broad geographic coverage. However, both are in the process of being acquired.

Nokia's $8bn bid to buy Navteq illustrates the "critical position" that the two independent holders of map intellectual property now occupy in the global navigation market, and may presage even larger acquisitions in this area.

"Nokia's purchase of Navteq, the world's last remaining independent provider of comprehensive global map intellectual property for GPS systems, means that the competitive structure of the navigation market has been altered fundamentally," iSuppli said.

"The deal also exposes the enormous supply-chain value wielded by map intellectual property suppliers like Navteq, and technology behemoths like Microsoft and Google may soon engage in similar acquisitions to maintain their position."