Nokia, once the dominant force in the mobile industry, has sold off its prized HERE maps division to a German carmaker consortium comprised of Audi, BMW and Daimler, technology blog Re/code reported this morning.
The $3.07 billion transaction (2.8 billion euros) is pending regulatory approval and should be completed in the first quarter of 2016. The deal is meant to “secure the long-term availability” of HERE maps as an open platform, as per a media release.
News of the deal arrives following months of speculation that a bunch of Silicon Valley technology giants were interested in a takeover bid, including ride sharing service Uber, as well as Apple, Microsoft, Facebook, Baidu and others.
Nokia’s best-in-class offline navigation property will continue to be licensed to other companies, at least for the time being. The long list of companies that use Nokia’s HERE technology include such names as Microsoft, Amazon, Samsung and a host of car makers.
The service provides mapping and location intelligence for nearly 200 countries in more than 50 languages and is one of the main providers of mapping and location services. HERE dominates in automobile mapping, claiming more than an eighty percent global market share for built-in car navigation systems.
The need to constantly refresh mapping database with relevant data means HERE is a low-margin business that costs a lot of money to operate. For example, the unit employs about 6,000 people worldwide and spends hundreds of millions of dollars annually on maps updates while reporting a little more than $1 billion in yearly revenue.
Each car maker will hold an equal stake in the maps business.
The consortium will not interfere into operational business and will run HERE maps as an independent unit. Following sale of its handset business to Microsoft, and after the HERE deal completes, Nokia will have two units left: a Networks equipment unit and a small unit focus on patent and brand licensing.
In the greater scheme of things, car vendors need HERE to power their autonomous vehicles, which are already being tested.
“The acquisition is intended to secure the long-term availability of Here’s products and services as an open, independent and value creating platform for cloud-based maps and other mobility services accessible to all customers from the automotive industry and other sectors,” the companies said in a media release.
There’s no doubt that high-precision HERE maps will play a crucial role as the car industry embarks to create integrated autonomous vehicles, especially given Silicon Valley giants like Google, which has been researching an autonomous driving car project for years, and upstarts likes of Tesla.
“Extremely precise digital maps will be used in combination with real-time vehicle data in order to increase road safety and to facilitate innovative new products and services,” said the companies.
HERE maps should also benefit from increased collection of anonymized data from the vehicles. For instance, upcoming traffic jams and hazards like icy roads can be delivered in real-time more precisely than before, based on calculations of individual data such as ABS activations and outside temperature.
As the system learns about critical bends on the road, it will be able to warn drivers in advance, activate assistance systems, navigate drivers through an urban area on a green wave with the appropriate engine performance and minimized fuel consumption and so forth.
Apple executives visited BMW’s Leipzig factory last fall, showing interest in its i3 electric car and asking detailed questions about both tooling and production.
“Apple executives were impressed with the fact that we abandoned traditional approaches to car making and started afresh,” a senior BMW source said. The Cupertino company is apparently working on an autonomous electric vehicle of its own, dubbed Project Titan, with the goal of putting a vehicle in mass production by the year 2020.
Nokia’s relaunched HERE for iPhone native application, depicted in this article, offers a redesigned user interface, turn-by-turn directions, a rich database of millions of points of interest, offline navigation and a lot of other perks.