With self-driving vehicles having huge needs for digital mapping systems, three major German automakers have just purchased the Nokia HERE advanced digital mapping unit to bolster their weapons in the autonomous car wars.
The three vehicle manufacturers, Audi, BMW and Daimler, will be equal partners in the $3.07 billion acquisition, which was announced on Aug. 3. The deal is expected to close in the first quarter of 2016, subject to customary closing conditions and regulatory approvals.
“High-precision digital maps are a crucial component of the mobility of the future,” Dieter Zetsche, chairman of the board for Daimler, said in a statement. “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.”
In an Aug. 3 post on the Official HERE 360 Blog, Nokia stated, “All carmakers are working toward providing amazing, new connected services, and only by collaborating and sharing data can we reach the critical mass to make real-time map updates a reality. No single carmaker can do it by themselves.”
The joint acquisition had been rumored for several weeks as was reported earlier by eWEEK.
“This is a big deal in my eyes because it’s the first time we’ve seen European manufacturer joining together to buy an important technology asset that will become critical for their future,” analyst Thilo Koslowski, a Gartner vice president and the automotive practice leader for the company, told eWEEK. Automakers typically have partnered to share vehicle engine, chassis and suspension platforms in the past to cut costs and development times, he said, but this deal brings such sharing to a whole new level. “It shows you how important the idea of self-driving cars and detailed maps data is” for the companies, he said.
Google has been working on its self-driving vehicle program for several years, but major auto companies have certainly not been sitting on the sidelines.
“Whoever can have the self-driving vehicles first has an advantage,” said Koslowski. “The challenge in all of this is that Nokia had a lot of automotive clients before and still has a lot of clients. Are those other manufacturers now going to be comfortable with these concepts? That could be a major potential issue for those companies going forward.”
To try to resolve such concerns, Audi, BMW and Daimler must continue telling other vehicle companies how they envision the joint acquisition moving forward and how it will be beneficial for Nokia HERE customers in the future, said Kozlowski.
Richard Windsor, an analyst with Edison Investment Research, said in an email to eWEEK that the acquisition could help the three automakers gain a deeper understanding of in-car digital vehicle software systems that are desired by consumers, including navigation and infotainment.
“Audi, BMW and Daimler all have significant shortcomings when it comes to the Digital Life experience in the car and this acquisition should help them begin to close the chasm,” wrote Windsor. “If these car makers are smart, they will also incorporate elements of how HERE operates into their processes for the creation of other digital experiences as this is where almost all car makers fall over.”
Windsor said that continued development of such systems “is going to play an increasingly important part in differentiating one automotive brand from another.”
He said he also agrees that existing Nokia HERE automotive clients might not be happy with the venture and could end up moving to Google or other partners in the future for their in-vehicle mapping technologies.
In-vehicle mapping and navigation systems continue to expand, with automakers around the world adding connected mapping services to their vehicles, often even in less expensive car and truck lines, due to increasing consumer demand. The built-in systems are profit-padding accessories for carmakers as they look to give consumers the mapping services they seek, instead of having to resort to plug-in, dash-mounted third-party GPS units or map apps on smartphones or tablets.
Audi, BMW and Daimler Complete Deal for Nokia Digital Mapping Unit
Nokia has been working on in-vehicle mapping for quite a while, and in August 2013, the company’s Nokia HERE business unit launched its Connected Driving service that was designed to help carmakers and in-vehicle technology suppliers connect the car and the driver to the cloud, according to an earlier eWEEK report.
Connected Driving offers a range of automotive products and services that build on the company’s mapping technology to provide customizable features on a flexible framework that allows automakers to differentiate the driving experience. It is aimed to help solve problems that drivers face daily, such as syncing routes and other personal information across their car and devices, and finding the right parking spot or closest gas station.
Nokia’s HERE auto service was built to provide in-car navigation and maps without a data connection. Drivers can get turn-by-turn, voice-guided navigation in more than 95 countries and 2D, 3D and satellite map views including street-level imagery, with more improvements to come.
Nokia has been undergoing quite a transition from its past leadership role in the smartphone and cell phone marketplace. With the $7.1 billion sale of its smartphone division to Microsoft in April 2014, Nokia left a business where it had been a major player for more than a decade. It looked like Nokia was done with smartphones.
But in July, Nokia announced that it is getting back into the business with plans to design and then license some new smartphone models in the future, leaving the actual manufacturing, sales and marketing to third-party companies, according to a recent eWEEK report. The smartphone work will start after the fourth quarter of 2016, when such work is permitted again under the 2014 deal with Microsoft.
Nokia did something like that before in November 2014, when the company announced its first-ever Android tablet computer, the N1, which is built under license by a third-party device manufacturer.
In May 2014, Nokia announced the creation of a $100 million Connected Car fund designed to identify and invest in innovations that would be important for a world of connected and intelligent vehicles, according to an earlier eWEEK story.