Nokia has finally closed its $2.8 Billion Here mapping service deal with the consortium of Car makers who had announced buying the service earlier this year. ‘Here’ maps has been bought by the triumvirate of Audi AG, BMW Group and Dalmer AG, and is used by mobile devices as well as connected cars for mapping and direction purposes.
The deal had been announced as early as August, but was stuck due to a wait for getting the requisite regulatory approvals and was projected to come through in 2016. However, in what warrants a nod at the efficiency of the regulatory system of Asia, Europe and the US, the approvals were granted even earlier than expected.
The sale had been expected ever since Nokia sold its mobile handset business — one of the biggest users of the Here service — to Microsoft, leaving the mapping service stuck rather like a branch without a tree. Not only did Nokia prefer to focus on its core, networking business, but also, the revenue contribution of Here wasn’t really on par with what Nokia expected of it, all leading up to a decision to sell it.
Well, while Here may have lost much of its relevance for Nokia with the sale of its mobile arm, it did remain a significant entity in the mapping business — thanks to the vast mapping data and navigation system available with it. Thus, when Nokia put it up on the auction block, there was no dearth of takers. The bidders, apart from the car consortium, also included Uber, Baidu, Chinese mapping entity Navinfo and several equity firms.
The entity was initially valued at around $2 Billion. however the final value which elicited the thud of the hammer was much higher — Euro 2.8 Billion, subject to purchase price adjustments. The adjustments when taken into account, brought down the price by some Euro 300,000, but the final price still equated up to a $2.8 Billion selling price, significantly higher than the previous valuation of the company.
The answer to this price surge, along with the huge interest shown by global entities in trying to grab hold of Here can be accounted for by considering it’s superb mapping system — which according to some, is comparable to that of Google itself. With around 300 different location attributes and the normal mapping and location-based applications — such as driving directions and street maps — Here also comes with the spatial data technology employed in video and gaming applications. The company also has foundational patents that allow use of its spatial data for the creation of video games and movie content.
Finally, the importance of location-based services has been steadily growing. From cars that can now connect to your smartphone to bark out directions to the mapping deployed by various applications and games to…. well, you get the idea. In fact, some of the new owners of Here, all prominent automobile makers in their own right, already integrate it with their cars. Hence, this purchase will allow them enhance and improve their mapping and direction related capabilities and enable them to use Here with a greater focus upon catering to their particular needs.
All of the three car makers, Audi AG, BMW Group and Dalmer AG, own equal stakes in the company and are expected to sit to a conference later in the day that will hopefully, also give us an insight into their future plans for Here — including the prospects of the company’s 6K+ employees.