Nokia has sold HERE to a consortium that includes AUDI AG, the BMW Group and Daimler AG. The deal will net Nokia EUR 2.8 billion, less EU 300 million that are recognised as liabilities of the firm. This will be a welcome boost to the troubled company. Nokia bought HERE, formerly Navteq for US$8.1 billion back in 2007 and this fire sale price indicates another huge mistake for the troubled Finnish company.
Nokia HERE to become HERE
When Nokia first bought HERE their intention was to set up a digital mapping company that would challenge Google. It made sense at the time but many analysts felt that the deal was overpriced. Since then the market has changed with vendors in the digital mapping space. The good news for Nokia is that there were two offers for HERE, one from the winning consortium and the second from Uber. This might have helped drive the price up slightly and it will be interesting to see what the car manufacturers do with it.
Each company will hold an equal stake in HERE once the relevant antitrust approvals have been granted. This is not likely to be completed until Q1 2016. Once the deal is complete it will be interesting to see whether HERE retains its independence and looks to grow its business wider or whether it will be become an integrated solution for the three auto manufacturers.
It could be argued this is a large investment just to add value for their automobiles. However it does mean that the auto manufacturers will no longer be beholden to Google and it provides them with access to data that they can tightly integrate into their connected car strategies.
Dieter Zetsche, Chairman of the Board of Management of Daimler AG commented “High-precision digital maps are a crucial component of the mobility of the future. With the joint acquisition of HERE, we want to secure the independence of this central service for all vehicle manufacturers, suppliers and customers in other industries.”
This would indicate that HERE hopes to become the digital mapping partner of choice for the automobile industry, whether they can achieve this will be interesting. HERE will need to strike a balance between offering value to their owners while not withholding technology from other manufacturers. Google themselves will no doubt exploit any weakness within the HERE platform to gain market share.
The roadmap for HERE includes the use of Swarm intelligence. Swarm intelligence in this application is the collection of data from decentralised intelligent systems such as those hosted in every car. The question will be how much of that data the different car manufactures are willing to transmit to the HERE cloud analytics platform and whether that information can be collected. Car manufacturers are already under pressure to security harden their systems after recent breaches.
Within the announcement the inference is that HERE will be able to collect data relating to road conditions, notably icy roads. This can be collected from ABS activations and temperature readings. The collection of such vast volumes of data will also help driverless vehicles become more of a reality if the data can be crunched and fed back in time. However with multiple such platforms out there and an incomplete knowledge that is likely to be some way off yet.
Whatever will happen to HERE in the future will be carefully watched by a number of companies, not least the other car manufacturers and Google. However there are other players, such as the startup Driveway Software that recently received $10 million in funding. Whether Driveway manage to leverage the data that HERE is collecting or HERE decides to go on the acquisition trail for some leading start ups in the industry will be interesting to see. It will be interesting to see how HERE evolves once the acquisition is complete, there could be some interesting announcements by the middle of 2016.