BMW, Daimler, and Audi buys Nokia's Mapping Business

[Marshall Placid]

Just released:

Germany’s biggest auto makers have clinched a deal to buy Nokia Corp.’s digital mapping business, beating out rival bidders for some of the vital technology for self-driving cars in a €2.8 billion ($3.1 billion) acquisition.

The deal is a coup for BMW AG, Audi AG and Daimler AG, the front-runners to buy the business for some weeks, as the auto industry and Silicon Valley technology companies jockey for position to develop and equip the next generation of cars. Nokia Here generated more than half its €970 million in 2014 sales from the auto industry, and the rest from location-based services.

Nokia, the Finnish telecom group which sold its mobile handset business to Microsoft Corp. last year, said on Monday it would receive proceeds of around €2.5 billion with the buyers taking on €300 million in Nokia Here debt. Nokia said it would book a gain of €1 billion. Nokia had built the business out of Navteq, a mapping service that it bought in 2008 for $8.1 billion.

Nokia Here, based in Berlin, is a main provider of mapping services with data on nearly 200 countries. It provides makers of navigation devices and cars as well as websites and apps with the data.

High-precision digital maps are vital for future self-driving cars because these require an up-to-date plan of a vehicle’s surroundings exact to the nearest centimeter.

The German car makers entered the bidding after Nokia announced in April that it was considering a sale after it agreed to buy Alcatel-Lucent and focus on telecom equipment, people familiar with the situation said. BMW, Volkswagen AG’s Audi, and Daimler’s Mercedes-Benz are the world’s leading makers of luxury cars by volume.

The car makers feared that Nokia Here’s technology-the most advanced digital map of the world’s major road networks-could fall into the hands of Google Inc., Uber Technologies Inc. or Apple Inc. That would put auto makers at risk of losing control of information systems inside the car that are vital to self-driving cars and future automotive safety systems

BMW, Audi and Daimler will each hold an equal stake in Nokia Here.

“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,” said BMW, Audi and Daimler in a joint news release.

The buys said that Nokia Here’s management would retain its autonomy with the company continuing to serve rival car makers.

Nokia Here earned an operating profit of €28 million from revenues €552 million in the first half of the year. The unit had 6,454 employees at the end of June.

The car makers said they expect the transaction to be closed in the first quarter of 2016, subject to approval of the relevant antitrust authorities.

BMW, Daimler, Audi Clinch Purchase of Nokia?s Maps Business - WSJ

So, the 3 luxury car makers gain control of crucial mapping technology.

IMO, this is great for car makers in general, as they don't have to depend on Apple or Google, etc. for mapping tech for the future of car-tech and self-driving tech.

This MIGHT lower costs for nav systems for the cars as well.

What do you guys think?

[Manic!]

Glad to see companies trying to make there own stuff instead of buying it from who ever provided the best price. My Dads ML500 had a Bose system with Navigation maps provided by Alpine audio.

[godwin]

I am afraid for the consumer the immediate to mid term impact is minimal... For North American users of the buyers are even less.. Nokia Here is very Euro centric. The only ones who will be impacted are truck drivers in Europe who use it a lot (especially the further East you go). It had lifted my Nokia holdings though, and probably give it some $$ leeway to buy Alcatel Lucent. Also it probably put TomTom on the auction block next.

The problem with automakers in general is who wants to sit in a car to program / search a Nav when you can pre program and lookup on your phone and connect via CarPlay / Android Auto? For the German 3, they are buying in for a bargaining chip for use in the future. Especially since Google autonomous cars is projected to only cost $<0.2/km to use and charge vs conventional is about $1 (those interested Google up Larry Burns Phd @ Columbia's study on this) .. It is not hard to see Google will give rides away for free in exchange for personal information.. who will get hit? well the existing car manufacturers.