16 September 2009

Nokia's NAVTEQ Acquires Small
Location Based Ad Technology Firm Acuity

Nokia continues to swallow up small technology firms and startups in an effort to build its own suite of services and become the next big internet power.

Through Navteq, a recent acquisition of Nokia's itself, Nokia has acquired Acuity Mobile. Acuity specializes in location based advertising delivery technology, a growing industry recently entered by the likes of CBS and even McDonald's.

This looks to be a wise move from the services standpoint. It looks even more intriguing when you take into account the reports coming from MobileCrunch that Nokia has flirted with the idea of ad-supported devices. Nokia already has the devices capable of delivering on the LBS data. They've worked with Acuity in the past, and evidently decided they had technology they needed to deliver ads in the context of location.

If Nokia's rumored plans come to fruition, we may be seeing device prices fall immensely. Nokia could theoretically place unmoveable widgets on the homescreen of its devices to display ads based on location and browsing habits, and share the profits from those ads with the carriers, or use the profits to offset the costs of the devices, and offer them at stunningly low profit margins to the carriers.

Either way, a new revenue stream may have been created with the acquisition of Acuity, and how Nokia plans to leverage the new technology it now has will be interesting to watch. The advance of DVR technology and online ad blockers has put pressure on advertisers to find new venues for display. Nokia may have created just that venue, and the near billion eyes looking at Nokia phone screens are a valueable commodity in that respect.

So now one has to wonder how much advertising will users accept, and will users want a device that always knows where it is and what websites it is browsing? How much of a price drop can one expect from an ad-supported device, and how much will it cost to opt out of the advertising agreement, or will you even be allowed to opt out? Will this be a big enough deal to draw carriers into putting more Nokia devices on the shelves? These will be the biggest questions Nokia will have to figure out in order for this acquisition to be considered a success. Should it be a success, the reward will be enormous for consumer device pricing and carrier adoption.