After months of negotiations and rumours, Nokia’s digital mapping division HERE has finally found a buyer in German car makers Audi, BMW and Daimler, according to a report by WSJ. The deal, if finalized, is expected to be worth $2.7 billion.
The announcement can be made by the end of this month itself, if certain issues related to intellectual property rights are resolved. Both the parties however declined to comment to WSJ on the report.
The move by car makers is seen more of an effort to prevent tech giants like Google, Apple from getting this technology for their self-driving car projects which analysts bet, are the future of transport.
The said car makers, after buying HERE, may open the division for other car makers such as Fiat, Renault, Ford, Toyota and General Motors Co. to buy stakes in it, or probably license the technology.
The goal has always been to run the service as an open platform for everyone,”
said a person familiar with the matter in an interview with the Wall Street Journal.
The final signing could take place in the next few days.
It is noteworthy that HERE is one of the most sought after mapping and navigation service by car makers with about 80% cars using its system in North America and Europe. 50% of HERE’s €970 million revenue in 2014 was generated by automotive industry.
Consequently, it has emerged as an industry leader in the field of high definition digital maps particularly used in automobiles.
HERE incorporates technology for digital mapping and offers dynamic real time data and updates about roads and traffic which are simultaneously fed to the cloud servers for use by other drivers. This is a huge improvement over the traditional mapping services which are static and rely on inbuilt GPS system in cars.
It is this dynamic and comprehensive coverage of traffic and routes all over the world which makes HERE a hot favorite among car makers, who are in league for developing self-driving cars. Self-driving cars need accurate information about the road ahead and traffic around the car in real time, something which HERE is the most capable of delivering.
Apart from the German car makers, Uber along with Chinese mapping company Baidu was also in the race of bidding reportedly offering a massive $3 billion. However, Uber backed out of the deal and instead bought a part of Microsoft’s Bing mapping division for an undisclosed amount last month.
Nokia bought Navteq Corp. for $8.1 billion in 2008, and also acquired other location-technology companies and developed it into its current mapping service HERE.
However, after selling its mobile division to Microsoft, it is now planning to sell the mapping division as well to focus on its efforts to become a provider of wireless-network equipment. The selling efforts have intensified in last few months, in particular since it bought its rival network maker Alcatel-Lucent SA for 15.6 billion euros in April to better compete with Huawei Technologies Co. and Ericsson AB.