Telmap Ltd., which was founded in 2000, was an innovative company. It launched an app long before the term app became popular and offered navigation software over cellular telephones (even before smartphones). The company offered its app for many years for payment through the mobile operators.
Telmap was the first company to offer information about traffic congestion, and this was a capability that was very limited for years on its app. During the period when Telmap came to the market, the only navigation solutions were dedicated PND devices for vehicles on which software was installed. Users who didn't want to pay hundreds of shekels for this product chose Telmap's solution, which was sold by Pelephone Communications Ltd., Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL), Mirs, and from 2009 Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR).
In 2009, Waze Ltd. launched its navigation app, offering a free solution that included real-time information about traffic congestion and speed traps and served as a social network for drivers. Within a short time users discovered that they could navigate for free with no need to pay the mobile operators NIS 20 each month for Telmap's service.
Shortly after Waze's breakthrough, the mobile operators began offering their subscribers Telmap's service for free but it was too late. Even Telmap's $120 million acquisition by Intel Corporation (Nasdaq: INTC) in 2011 could not save it.
Users preferred Waze, which presented more reliable information about traffic congestion. Telmap took a long time to develop this capability and even today its service is less successful in terms of traffic reports.
At the start of the year, Telmap decided to change its business model and launch its free M8 app for iPhones and Androids. The company hoped to receive revenue from ads and partners.
In June, Google Inc. (Nasdaq: GOOG) announced that it was buying Waze for $1 billion. This deal probably marked the end of the road for Telmap with the company's senior executives understanding that they would not be able to compete, and they stopped developing the M8.
This is a sad end for a company that did not perceive the changes that were taking place in the market. Had Telmap understood the need for a free app based on user information, it might still have been up and running.
Published by Globes [online], Israel business news - www.globes-online.com - on July 28, 2013
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