Intel Looks For Revenue From Location Services, Buys Telmap

Intel (NSDQ: INTC) has made no secret of its interest to be a more central player in the mobile space and now it’s showing us the money, too. The company has announced that it is buying Israel-based mapping and location-based services company Telmap. The move comes as there are signs of other mapping efforts finding it difficult to turn a profit. Just yesterday, Nokia (NYSE: NOK) announced that it was cutting 1,300 people and streamlining operations in its loss-making location and commerce division, where mapping company Navteq is the crown jewel.

Financial terms of the deal have not been disclosed. Nissim says that Telmap has been profitable since last year, and expects to be so again this year. Sales in FY 2010 were $28 million, and Nissim says that Telmap expects to have turnover of $33 million dollars in FY 2011.

Prior to the acquisition Telmap had raised $70 million from the UK-based Sciences Navigation Group.

The acquisition, which was announced during Intel’s AppUp Elements developer conference in Seattle, will give Intel a potential source of revenue from mapping services. Telmap powers mapping applications for a number of mobile operators, including Orange, Telefonica’s O2 and SFR in France, owned by Vivendi (EPA: VIV), and this is where the majority of the company’s revenues come from today, according to Oren Nissim, the CEO of Telmap, who spoke earlier to mocoNews.

Additionally, Telmap will be used to enhance the ecosystem that Intel is trying to create for developers for AppUp.

“With Telmap we can directly provide developers with location-based services spanning devices, operating systems and CPU architectures…with just a few lines of code,” Peter Biddle, GM of Intel’s AppUp Products and Services, wrote about the deal in a blog post.

Telmap has been working to develop more services on its location platform that can generate further revenue, for example location-based advertising that works on top of a free mapping service, “following the concept of the fremium model,” said Nissim. Apps like the Telmap Navigator are free to download but then have additional features that may be charged, or used with license fees paid to the companies that integrate the service.

Further down the line, there may also be a way for Intel to integrate Telmap’s capabilities into its work in wireless chips — although how has not been spelled out by either Intel or Telmap at this point — as well as into Tizen, the Linux-based OS that Intel will be developing with Samsung.

“The overall strategy will need to connect at some pont, but i cannot comment on how,” said Nissim, who becomes the GM of Telmap post-acquisition. He also noted that the rest of his executive team will remain intact, with Telmap operating as a subsidiary within Intel.