$7.7bn acquisition turns up the heat on TomTom.
Nokia has agreed to acquire Navteq for US$7.7bn (AUD$8.7bn) in cash.
Navteq is the world's largest provider of digital maps which power devices and services ranging from GPS navigation to online mapping for Google, Yahoo and Microsoft.
The deal follows shortly after TomTom's US$2.5bn (AUD$2.8bn) acquisition of TeleAtlas, the world's second largest map maker.
The Nokia purchase is considered an attempt to increase the competitive pressure on TomTom.
Nokia intends to use the maps to build out its location-based offerings and shrink development times for such services. The firm also touted the convergence trend. Nokia currently markets one mobile phone with a built-in GPS receiver.
"Location-based services are one of the cornerstones of Nokia's internet service strategy," said Nokia chief executive Olli-Pekka Kallasvuo. "The acquisition is another step towards Nokia becoming a leading player in this space."