Nokia firmly focuses on networks and hardware as car makers move to secure connected future
Nokia is selling its HERE map business to a consortium of German carmakers for a deal worth up to €2.8 billion (£2bn).
The consortium, comprising Audi, BMW and Daimler, had been one of a number of reported suitors for HERE, which provides mapping and location services to the auto industry as well as other technology companies like SAP, Microsoft and Samsung.
Uber and Facebook had also been among those linked with a move for HERE, but it appears as though the desire from the auto industry to secure a platform that can power connected cars and even self-driving vehicles has won out.
Right HERE, Right Now
“The new ownership structure of HERE will allow us to accelerate our strategy, further scale our business and fulfill our intent to become the leading location cloud company across industries,” said HERE president Sean Fernback.
Berlin-based HERE was one of three business retained by Nokia following the £4.6 billion sale of its devices and services unit to Microsoft, along with Nokia Networks and Nokia Technologies. However the Finnish manufacturer’s desire to focus on and invest in the two latter businesses means it is likely to believe HERE is worth more to another party.
Nokia is set to complete an £11.2 billion merger with French rival Alcatel-Lucent early next year and wants to design and license smartphone designs for other manufacturers once the terms of its deal with Microsoft allow it to.
“With this step we complete the latest stage of Nokia’s transformation,” said Nokia CEO Rajeev Suri. “We integrated the former Nokia Siemens Networks, divested our Devices & Services business, and have now reached agreement on a transaction for HERE that we believe is the best path forward.
“Going forward, we will focus on our planned combination with Alcatel-Lucent. Once that is complete, Nokia will be a renewed company, with a world-leading network technology and services business, as well as the licensing and innovation engine of Nokia Technologies.”
Analysts claim the deal could create a de facto standard for developments like connected cars but are also keen to see if HERE, one of the few independent providers of mapping services to the technology industry, has any impact on a market dominated by Google in the consumer space.
“The progress towards autonomous driving will require real-time availability and on-demand downloading of high definition maps quite different from navigable maps available in vehicles today,” said Jeremy Carlson, Kevin Hamlin and Gerrit Schneemann of IHS Automotive.
“A reduction in independent, global providers of this type of information would likely see higher price points which may force companies to invest in proprietary systems, in turn slowing the development and deployment of new technologies. Ensuring availability to the automotive industry would help avoid disrupting that development.”
“The acquisition by Audi, BMW, and Daimler poses an interesting opportunity of how an industry collective will share a strategic resource with competitors. The most likely answer is an industry consortium supported by an initial fee, as well as an annual fee for both membership and to support ongoing costs in R&D, collection and maintenance of high definition maps in exchange for open access to the maps provided by the consortium. Those not part of the consortium are expected to pay a normal licensing fee as they would today.”
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