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Archive for November, 2007

Prior to this year’s shake-up, companies like TomTom, Garmin and Magellan were content to buy their mapping data from major mapping suppliers Tele Atlas or Navteq, which are responsible for creating and constantly updating accurate street maps. Then came the unanticipated popularity of personal navigation devices, which turned this comfortable set-up on its head.

First off the mark back in March 2007 was integrated mailstream management solutions provider, Pitney Bowes, with the announcement of their intention to acquire MapInfo, a global provider of location intelligence solutions, for R2,7billion.

Next up in July 2007 was TomTom, Europe’s leading producer of personal navigation devices with an offer to purchase Tele Atlas, its mapping data supplier, for R18 billion. The race heated up on 1 October 2007 when Nokia took out the remaining international map content supplier, Navteq for R53 billion. (On a side note, Navteq supplies mapping data to major players like Google, Microsoft and Yahoo.)

When announcing the deal, Navteq president and CEO, Judson Green expressed his excitement at the thought of what could be achieved by combining Navteq’s location experience with the resources of Nokia, which has a customer base of more than 900 million people. The mind boggles at the possibilities here.

Garmin’s top management must have gone green at the gills on hearing the news – they obtain most of their mapping data from Navteq. Making matters worse, their main rival TomTom was in the process of acquiring the only other major map content supplier, Tele Atlas.

Moving quickly Garmin leapt into the race on 31 October 2007 with a rival cash offer for Tele Atlas. Not taking a chance on losing out, TomTom signaled their intention to increase their offer on 7 November. To TomTom’s relief I am sure, Tele Atlas indicated their willingness to accept TomTom’s revised offer the very next day.

Recently we have seen some action on South African territory with Tele Atlas acquiring a 76% stake in Pretoria-based Georigin, which specialises in map data from West, East and Southern Africa covering a population of 500 million people. Georigin in turn has a 49% interest in local company MapIT, which owns the rights to a map database of South Africa and Nigeria. Almost simultaneously Australian-based AAMHatch announced the acquisition of local company AOC Geomatics which provides survey and mapping services to South Africa and the rest of Africa.

This surge of interest in map content producers is good news for users of map data. We can expect more regular map updates as well as the introduction of a range of innovative mobile location-based services for both business and personal use. In the meantime though keep your eyes and ears open for Google and Microsoft’s reactions to all this market manoeuvering.

 

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The future looks very bright for the GPS industry with “The World Global Positioning Systems Market Forecast (2006-2008)” by market research firm Global Industry Analysts (January 2007) predicting that the global GPS market will reach a value of more than R210-billion by 2008.

Another interesting US study by, Ventana Research (September 2006), points to the industry experiencing growth over the next few years, however, the research also identifies the need for technological advances to be offset against consumer concerns about cost, reliability and integration.

The survey reveals that 35% of respondents highlighted improved precision in readily available GPS and related technology as the number one industry trend, and 47% identified this as the most important technological development. Respondents rated further advances in engineering and system design lower than increasing precision, with embedding technology into commonly used devices receiving 40%, and improving the design of receivers, 39%.

A different survey by the US Consumer Electronics Association (December 2006) indicates that 33% of future GPS buyers are interested in owning a phone that has GPS/navigation capabilities. Clearly pointing to integration playing a major role in future market developments.

With regard to specific applications of GPS and related technology, nearly half of the Ventana Research respondents rated mapping the most important. Interestingly the study points out that with mapping being a basic capability of any location-specific application, its top ranking as the most important type of GPS and related technology application, illustrates the emerging nature of this particular market. However, the report also indicates that users don’t just want to present maps on a variety of devices; they want to use maps to calculate positioning and to navigate.

The research identifies strong concerns over several vital issues. Expense came out on top with 73% of respondents citing the implementation costs of this technology as cause for concern. Following this, responses varied according to the various industry types. Respondents in surveys and mapping selected precision as their top priority while those in avionics targeted guidance and navigation. Military respondents identified navigation while those working at utilities chose tracking.

The Ventana survey also examined responses based on industry roles as manufacturers and purchasers to determine the maturity of the industry. They found that the priorities and intentions of the two groups were not in sync. 47% of purchasers pointed to internet research as their main source information influencing their purchase of GPS and related technology, while manufacturers only ranked it fifth. In addition, marketers indicated a preference for traditional marketing methods like direct marketing, trade shows and conventions; while purchasers placed a bigger emphasis on print advertising and industry trade publications’ websites. (Great news for PositionIT!)

Interestingly when asked about anticipated changes over the next three years, both manufacturers and purchasers of GPS related technology pointed to the largest expected change as being their choice of suppliers and partners. This means new players can be expected in the market as well as consolidations among existing manufacturers. There are also likely to be new business opportunities for those prepared to take the advantage of these predicted changes. Exciting times lie ahead.

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While the big boys organise billion rand deals to ensure control of the rambunctious Sunday Times, the man in the street is feeling the impact of the international debt crunch. 

Potential losses from the sub-prime mortgage crisis currently stand at US$1 trillion and financial markets are jittery as the US government and the international banking sector persist in “hiding the corpses”, making a proper assessment of the damage impossible (“Dead men walking’ is no answer to the US lending plague”, Saturday Star – 10 November 2007). 

Money, money, money

South Africa is not immune to the effects of this international debt crisis. In addition, financial expert Bruce Cameron believes that we have yet to experience the full consequences of the “over-exuberant” lending by South African financial institutions in the build-up to the introduction of the National Credit Act (NCA) in June.

Already the average South African consumer is feeling the pinch with several interest rate hikes inflating their debt repayments. Applying for credit is no longer an easy answer for people experiencing cash flow problems with the restrictions of the NCA making it difficult for citizens to acquire more debt.

In the light of the financial squeeze being experienced by the average South African, how is it possible that Koni Media Holdings is able to get funding for its overvalued R7- billion bid for Johncom, owners of the Sunday Times? What about the financial muscle behind Mvelaphanda Holdings’ acquisition of 30% of Johncom and their rumoured intentions to further increase this stake (Business Report)? 

Obviously these deals are more than just financial in nature, media clout and political power being what they are ultimately about. But isn’t anyone questioning whether these politically inspired business deals are affordable in this shaky economic climate.  

Do the restrictions of the National Credit Act not affect the big boys too? Or do they know that it is the man in the street who will ultimately end up paying their bills?

Photo credit
Stock.xchng

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China has announced restrictions on foreign investment in some of its key industries. 

Sectors falling under this new restriction include property, financials, oil and rare metals, while investment in cleaning up the environment and developing renewable energy will be encouraged (Business Report). 

China rulesThe move is being seen as an attempt by Beijing to slow down its booming economy, but the turn towards protectionism has some analysts worried. It also flies in the face of China’s own investment strategies in Africa. 

According to reports, Industrial and Commercial Bank of China (ICBC) is prepared to pay R36,67 billion for 20 % of our very own Standard Bank (Mail & Guardian). If it comes off, it will be the biggest overseas acquisition by a Chinese bank to date.  

The world has been aware of Beijing’s moves to encourage Chinese economic expansion abroad, particularly in resource rich developing countries. But until now Chinese investment activities in Africa have focused on mining and infrastructure projects. This new foray into the African financial services signals the extent of China’s interest in Africa. 

Does this mean that Standard Bank with its network of 713 branches in South Africa and 240 in the rest of Africa is going to be the tool via which China will consolidate its economic influence over Africa (Fin24)? It certainly appears so. 

Will Standard Bank in turn be allowed to conduct a massive investment in China’s financial sector? It appears not. 

On one level the deal is good news for South Africa.  

Certainly we could do with a massive injection of foreign currency. Unlike China we are not blessed with an abundance of foreign reserves. But aside from the economy, how will all this cash affect South Africa? 

China makes no secret of the fact that it is not interested in influencing the politics of the countries it invests in. Unlike money from Western sources, Chinese loans do not come with political strings attached. A fact looked on with favour by many African leaders. However, who gets the money will certainly have an effect on who gets to play on the South African political stage. 

This massive investment is clearly going to have an influence on our democracy and just at a stage when it is starting to wobble slightly.  

Photo credit
HAAP Media Ltd

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Perfect passengers

Take-off

The passengers on the Nationwide Airlines flight that lost an engine last Wednesday impressed me no end. 

They sat calmly in their seats while their plane dramatically lost an engine on take-off and did not give in to mass panic. Some of them were even responsible for advising the cabin crew that the engine had fallen off. 

Newspaper and online reports have been full of praise for the pilot and the crew who, by all accounts, seem to have handled themselves wonderfully. However airline staff undergoes training for such eventualities. They know whether it is possible for a plane to continue flying after losing an engine and they know what they have to do to ensure that plane, crew, and passengers land safely.

The average person has no clue what it means when your twin-engine plane loses an engine on liftoff.  

I am sure a lot of the passengers assumed that death was imminent – it’s what I would have thought. That they didn’t panic and lose control is a testament to their courage.  

Certainly the crew and pilot’s handling of the emergency contributed to the passengers’ composed reaction to their ordeal. I am fairly sure that if the airhostesses had screamed hysterically while the pilot panicked, the atmosphere on that plane would have been very different. 

As it was, the passengers’ terrifying experience involved a loud noise being audible on take-off followed by the plane suddenly veering sideways. Then when pilot Trevor Arnold accelerated his remaining engine to ensure a successful take-off, a “massive shudder shook the plane as the two-ton engine…tore clean off the wing” (Death Defying, Saturday Star, 10 November 2007).  

All of this would have left me immobilised in a state of frozen terror and no doubt that is what happened to most of the passengers. However their ordeal continued for a further half-an-hour as the plane took off, climbed to a safe height, circled over False Bay and dumped its fuel, before landing again. Ample time for the travelers to emerge from their shock and move into a state of mass hysteria.  

But by all accounts though, the passengers remained remarkably calm. They listened to the crew and followed instructions on how to handle an emergency landing. Quite amazing in a country where many of us break by-laws with impunity – talking on cellphones while driving, sailing through red robots and flaunting authority whenever it suits us. 

So while the Nationwide Airlines’ crew gets an A plus for their handling of this dangerous event, the passengers deserve gold medals for bravely flying in the face of death.  

Related links
Plane loses engine during takeoff 
“They took off and left the engine behind”
Nationwide Boeing engine ‘sucked in object’
Engine falls off CT plane
Aircraft engine falls in flight 

Photo credit
Nationwide Airlines – www.flynationwide.co.za

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Parents of addicted video gamers can stop worrying. Their children are the future business leaders of tomorrow. 

Katja Goebel, Mervyn Govender and Steve Drake came to this conclusion in a paper written as part of their MBA studies at the University of Cape Town Graduate School of Business last year (The Star, Business Report, 31 October 2007). 

The authors’ research reveals that far from being mind-numbing, meaningless entertainment, video games are actually problem solving exercises packaged in fantasy adventure scenarios. They point out that the strategy involved in most of these games revolves around collaboration and communication, and that gamers are required to be creative and intuitive if they want to achieve success.

Computer gamers

In addition, computer games teach by trial and error illustrating, most effectively through play, that failure is a necessary part of achieving success. The authors believe that as a result of this, this generation of computer gamers will be more willing to take risks and have more entrepreneurial ability. 

Massively multiplayer online games (MMOG) played over the Internet by millions of players are also providing massive learning platforms that further emphasise the benefits of teamwork and communication. By making use of players’ best abilities and sharing knowledge, gamers experience for themselves the advantages of teamwork and peer learning (see Army of Darkness). 

John Beck, co-author of the book “Got Game: How the Gamer Generation is Reshaping Business Forever”, believes that this generation of video gamers is going to have a major impact on businesses and their perception of teamwork and business strategy.  

But why let the video gamers inherit the earth.

Many children are bored out of their minds at school with old-fashioned teaching methods. Why not spark their interest by incorporating gaming technologies into the curriculum as learning tools? Why not let children learn about natural science and maths by playing computer games?  

What better motivation to get your questions right, than by being allowed to move onto the next level and have a little fun.

Photo credit
Clare van Zwieten

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