Last week wireless operator Vodafone publicly announced the closure of its Sweden-based mobile navigation subsidiary Wayfinder. Currently, Wayfinder has about 95 employees in Sweden, Romania and the UK, most of whom will be laid off.

The reason given by Vodafone is that “since we bought Wayfinder the business model has changed”, said Vanessa Curran, a spokesperson for Vodafone, referring to the free Google and Nokia navigation services. Vodafone clearly does not want to invest another penny in a market it believes has no future for revenue.

Mobile Industry Review also had this internal email announcing the closure of the service:

“Due to the huge competitive pressure generated by the market entry of Nokia and the upcoming launch of Google navigation, Vodafone is proposing to close down Wayfinder. While awaiting the outcome of the negotiations with the unions and the decision, we will not be working on any development and will not deliver any new Location Services.

What happens now?

Essentially, Vodafone Internet Services / Location Services (aka Wayfinder) stops development projects with immediate effect. A transition team helps in winding down the services and where possible, to mitigate adverse business impacts for a period of time.
Support for Tailormade Maps continues and service continues to run for H1/M1 as well as for horizontal handsets. There will be no bugfixes made on any of the horizontal platforms.
We will wind down the services in an orderly manner. What this means in practice is that:
- we stop embedding any of the services (Navigation, Locate) on new handsets
- we stop producing new releases, porting to new handsets, making software maintenance releases
- we start withdrawing the applications from app stores and similar download channels (in a way as to not harm the business)
- all projects, including World Cup Locate project and 368 development are stopped with immediate effect”

Sudden decision
This decision is very sudden and shows a complete change of strategy. Vodafone indeed bought Wayfinder Systems AB in December 2008 for $29.4 million, two and half times its market value, demonstrating a strong belief in developing in-house location-based services.

At that time LBS was understood as an important part of upcoming Vodafone internet services, later known as Vodafone 360. “Vodafone Group is committed to delivering new revenue growth around a rich set of mobile internet services. Location-based services make up an important part of this commitment, enabling Vodafone Group to offer customers new, exciting services as a differentiator while driving mobile data growth. This acquisition will help to ensure that more of these unique services are delivered to a wider base of customers across the Vodafone group footprint”, they said.

In addition, Wayfinder was still hiring people as of December 2009, when several senior software engineers joined the company. “We are currently recruiting to our offices in Lund, Sweden and Cluj-Napoca, Romania”, is still displayed on Wayfinder’s homepage today.

This announcement is also completely in opposition with the strategy that was expressed until very recently by Vodafone (read here our interview with Fabrizio De Liberali).

According to sources close to Vodafone, it seems this new strategy was both the result of some recent management changes and the fact that projects based on the Wayfinder technology executed slowly and/or poorly. The very low ratings received by the Vodafone Navigator application for the iPhone launched recently in the United Kingdom surely did not help.

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