16/04/2007

THE NAVMAN STORY: PETER MAIRE INTERVIEW

My cover story in The Business magazine in The New Zealand Herald out today is based on an in-depth interview with Peter Maire, the founder of satellite navigation company Navman. Maire talks frankly about hid disappointment over where things ended up with Navman, his frustration at the lack of vision when it comes to Government initiatives in the IT sector and his hopes and plans for Cadmus, the Eftpos terminals maker he has become chairman of.

The piece is not yet online, there's usualy a delay in The Business features going up. But I'm posting the guest editorial I wrote for this week's magazine and a sidebar to the story that features an interview with a satellite navigation device expert who gives a critical look at Navman's products.

THE BUSINESS | editorial:

Satellite navigation company Navman was our only truly global consumer electronics brand, one you could see prominently on display in electronics stores in cities throughout the world.

With the vision its founder Peter Maire had for the company, even after he sold it to US conglomerate Brunswick, it seemed a strategy to work with car makers would make Navman even bigger.

But globalization isn’t a one way street. The forces that brought Brunswick to New Zealand also led to it scraping its move into high-tech development and selling Navman in pieces less than three years after in bought it.

When Brunswick boss George Buckley was in New Zealand to ink the Navman deal, he told us that "if the Americans are coming, it's to learn from the New Zealanders," not to take our intellectual property and move on. It didn’t pan out the way Buckley planned and Maire is deeply disappointed at what happened to his company.

But while the remnants of Navman have been sold to Norwegian and Taiwanese companies, there’s much to be salvaged from the whole experience.

As a country we’re building a huge resource in these wealthy entrepreneurs who have sold their businesses offshore and now have a pot of money to invest in new ventures. Very few of them retire to the beach never to be seen in business circles again. Driven by the innate need to succeed and in many cases, a heart-warming desire to give something back to their country, they start over, creating more intellectual property, more jobs, more opportunities for New Zealanders.

That’s why we’re lucky to have people like Peter Maire, Rod Drury, Sam Morgan and Neville Jordan. In the technology sector in particular, we now have a group of individuals who have been to the cut-throat North American market and survived, are respected in the Silicon Valley venture capital clique and have learnt how to take Kiwi companies global – often from their own mistakes.

As a result, our fragile IT industry is finally starting to show signs of solid, coordinated development.

Peter Jackson’s success in the film industry shows what can be achieved when even a small group of individuals and companies in a particular industry make it overseas. There’s a domino effect back home, opportunities open up for everyone, the world comes calling.

And while we invite our successful entrepreneurs to take seats on Government boards and lead well-meaning think tanks, too often their ideas are ignored and, frustrated by bureaucracy, they lose interest.

We need some visionary thinking at a Government policy level to capitalize on the successes our technology sector has made in the last few years. No longer can we afford to tinker and fiddle, as Maire puts it.

Traditionally, we’ve managed to pick up some of the crumbs because we have a skilled, English-speaking labour force. But faced with a crippling shortage of highly skilled and experienced workers, one getting so bad it will probably force more technology development offshore, we can’t afford to be complacent in trying to attract global attention. We need to get more multinationals here, undertake better quality R&D and do more to attract quality VC investment. We need to get the infrastructure in shape so we can take advantage of the revolution in internet services that is underway. Our tech sector luminaries aren’t reticent in spelling this out. The question now is who will take the lead and make some visionary changes?

JUST HOW GOOD WAS NAVMAN?

If Peter Maire’s vision for Navman diverged with those of its American owners, there was consensus when it came to the devices that made up Navman’s most consumer-centric business, that of personal and in-car navigation.

Maire says Navman’s product development didn’t suffer despite the turmoil in Brunswick New Technologies and that the existing line-up is “as good as anything else” on the market.

Yet despite generating in excess of US$300 million in revenue last year, Navman’s personal navigation division was bleeding cash when it was sold to Taiwanese electronics maker Mitac last month.

Satellite navigation expert and editor of the popular website Pocketgpsworld.com, Darren Griffin, says Navman shook up the industry with a product that converted handheld computers into navigation devices.

Ironically, Pocketgpsworld emerged four years ago out of Griffin’s frustration with one of Navman’s GPS attachments, which was designed to fit his Compaq iPaq handheld computer.

“Although revolutionary they were very problematic and a group of us formed a Yahoo group to discuss the product and solutions,” he says.

The website was born and its forums now host hundreds of users who visit to read in-depth reviews of GPS devices and seek advice on navigational issues.

Navman led the industry with its SmartST navigation software, says Griffin and later models of its in-car navigation units benefited from improved design.

But somewhere along the way, Navman “lost the race” for first place in the GPS market.

“They were very well placed at the start, developed the first true consumer mapping solution and should have been the market leaders as a result,” he says.

A key failing, according to Griffin was Navman’s delay in allowing geographical points of interest to be placed on electronic maps, letting users pinpoint notable features.

“Competitors who did have built-in support, particularly for speed cameras, took a huge lead. At that time I thought Navman were very blinkered in the path they were intending to take. They were not open or receptive to advice and even now although they have support for custom points of interest, it is poor,” he says.

Brunswick complained about cut-throat competition in the GPS market leading to lower margins. But Griffin says Navman also failed to stay innovative.

“With the exception of their SmartPix solution, their products lacked any other features which stood out and indeed in some areas such as custom points of interest, they had very poor support.”

There were many things weighing in Navman’s favour - products compared well on price, and the Navman brand was well-liked.

Griffin and his fellow editors have been watching the Mitac buy-out of the Navman personal navigation division with interest.

“I hope that Mitac do retain Navman as a wholly separate brand but I fear they may eventually subsume them and use the Navman name for their own product lines,” he said.

While Mitac had a good existing product line in the Mio, Griffin said the time was ripe for a strong competitor to take on market leader TomTom.

“TomTom have reached something of a plateau this year and we all wish someone would produce a product that could give them a real run for their money.”



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