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Nokia’s digital mapping and location services unit, Here, is to remain in European hands after a consortium made up of Audi AG, BMW Group and Mercedes-Benz parent Daimler AG announced it is to move forward with the acquisition of the business.
The acquisition values Here – which was founded in the US as Navteq in the 1980s and bought by Nokia in 2007 – at €2.8bn (£1.97bn).
Here exploits cloud technology to deliver real-time, predictive and personalised location services on smartphones, tablets, wearables and – importantly for its new owners – connected vehicles. It also serves companies such as Microsoft, Samsung and SAP and offers consumer smartphone apps on Android and iOS devices.
Passing over Uber
The divestment of Here was first proposed in the wake of Nokia’s acquisition of Alcatel-Lucent as the venerable Finnish firm refocuses more on network technology and services.
Audi, BMW and Daimler emerged as potential bidders for the unit early on, with companies such as Apple, Uber and Facebook also reported to be in the running.
“With this step, we complete the latest stage of Nokia’s transformation,” said Nokia president and CEO Rajeev Suri.
“We integrated the former Nokia Siemens Networks, divested our devices and services business, and have reached agreement on a transaction for Here that we believe is the best path forward for our shareholders, as well as the customers and employees of Here.
“We will focus on our planned combination with Alcatel-Lucent. Once that is complete, Nokia will be a renewed company, with a world-leading network technology and services business, as well as the licensing and innovation engine of Nokia Technologies,” said Suri.
Here president Sean Fernback said the sale would allow the business to scale out and fulfill its intent to “become the leading location cloud company across industries”.
The unit generated net revenues of €971m in 2014 and an operating profit of €28m in the first six months of 2015.
Maps for everyone
Audi, BMW and Daimler said they would continue to develop Here as a “strong and independent” provider of maps and location services.
With an independent management structure in place, they will continue to expand its product offering and make Here available to customers across all industries.
“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,” said Dieter Zetsche, Daimler chairman of the board of management.
Of particular interest to the three acquiring carmakers is the vast amount of data being generated by connected vehicles using the service.
“As the volume of anonymised data from the vehicles increases, services will become more convenient, more connected and further tailored to individual requirements,” said Ulrich Hackenberg, member of the board of management for technical development at Audi.
The practical benefits of this data – known as swarm intelligence – when it comes to the future of connected or autonomous vehicles could be enormous.
For example, it could warn of real-time hazards based on calculations of individual data, such as the activation of ABS systems on individual vehicles, or identify upcoming traffic jams more precisely and reliably.
Meanwhile, predictive data, such as anticipating traffic light phasing, could help drivers move through urban areas by catching “green waves” of traffic lights, therefore minimising fuel consumption and time spent stationary.
Here’s core product – its maps – will also be important for autonomous driving and vehicle assistance systems. Both will require up-to-date plans of a car’s surroundings down to the nearest centimetre so it can react in real-time.
While Here already produces extremely precise static maps, they can be verified more exactly and continually updated with a constant flow of data from vehicles’ surroundings.
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