A little more news is starting to creep out on the sale of Magellan to MiTAC, giving us some insight into what this may mean for the GPS market. According to DigiTimes,
MiTAC also said that the deal includes Magellan's "brand, trademark, software, intellectual properties, operating staff, client base and marketing network."
MiTAC and the Magellan Professional division
The deal is worth up to $96 million. While Shah Capital bought Magellan for $170 million in 2006, this does not translate into that large of a loss, since they appear to be holding onto the Magellan Professional division. I'm guessing that the latter is retaining some rights to use the Magellan name and may have worked out a manufacturing deal with MiTAC, since at least one professional and consumer product shares the same platform — the MobileMapper 6 which appears to be a beefed up Triton. All of this leads us to believe that there will be an ongoing relationship between the Magellan Professional division and MiTAC.
On the consumer side, I believe that MiTAC may drop the Mio line entirely in the U.S., seeking to capitalize on (and hopefully revitalize) the well known Magellan name.
Implications for the handheld GPS market
This could also give MiTAC an entree into a handheld market that is overwhelmingly dominated by Garmin. Despite its small size compared to the auto sector, the handheld market could prove enticing since prices have held up better there.
In fact, this could be a good match. MiTAC seems more capable and experienced than Magellan when it comes to working with the Windows CE platform, so perhaps they could reduce the bugs that, for example, have bedeviled the Triton series.
Meanwhile, both Magellan and MiTAC are quicker to innovate than Garmin, so they stand a chance of competing on new feature sets such as live weather radar and GPS position reporting ala the SPOT Satellite Messenger. And Garmin could definitely use the competition (though DeLorme seems to be gaining a little market share with the introduction of their PN-40). Of course, that's the optimistic perspective. I just hope MiTAC has a clear idea where they are heading with this acquisition.