German Auto Consortium Set to Buy Nokia Map Unit

Kevin Dennehy

The value of accurate maps is not lost on the automotive industry as it transitions from connected cars to automated vehicles. Three German automakers are rumored to be making a multibillion-dollar investment in Nokia’s HERE mapping division. If the deal goes through as expected by late July, Nokia, which purchased HERE (then called Navteq) for $8 billion in 2007, will have spurned several deep-pocket suitors.

Although not officially confirmed, Nokia’s HERE digital mapping service is set to be purchased by a German auto consortium of Daimler, BMW and Volkswagen’s Audi unit, according to published sources.

Estimates of the deal place it in the $2.7 billion to more than $3 billion range. The potential sale puts to rest industry concern that Google or another giant non-automotive entity would make the winning bid for a company with increasing importance to connected and autonomous vehicles.

Either way, it’s too early to analyze what exactly are the consequences if the German consortium closes the deal with Nokia, said Thilo Koslowski, Gartner vice president and analyst. “In order to justify the purchase price of the acquisition, it will be in the interest of any acquiring party to keep Nokia HERE’s future role as neutral as possible in order not to alienate other clients,” he said. “I could imagine that contractually the acquiring party might be tied to serving these other clients for a least a certain time. If that doesn’t happen, and the deal would be ‘exclusive,’ then it would certainly boost the appeal of other map data providers and encourage new players to emerge.”

If the deal goes through, the German consortium plans to invite such other automotive companies as Fiat Chrysler, Ford, Renault, Toyota and General Motors, according to the Wall Street Journal.

Another take on the potential agreement could be whether car companies have to weigh the pluses and minuses of to join the consortium — or map competitor TomTom needs to consider whether it has more to gain from remaining independent or creating its own consortium, said Roger Lanctot, strategy analytics associate director, global automotive practice.

Industry old-timers may remember the bitter rivalry between Navteq (formerly Navigation Technologies) and Tele Atlas (formerly Etak). This rivalry has remained, even though the names have changed and the location industry has evolved dramatically since 2007, when both Navteq and Tele Atlas were bought by Nokia and TomTom, respectively, in multibillion-dollar deals.

The bidding war for HERE began in April, when Nokia purchased Alcatel Lucent to transition from the location industry. In addition to the German auto consortium, Uber and Chinese technology provider Baidu, Google and Apple were said to be potential buyers. However, Google’s purchase of HERE would have been disruptive to the auto industry, Lanctot wrote in a LinkedIn column. “Google buying HERE would drive the entire industry into the arms of TomTom while removing the leverage-ability of a map duopoly. Google buying both TomTom and HERE would annihilate billions of dollars in research and development activity by car makers seeking to create a truly driver-oriented browsing experience intended to enhance safety,” he wrote.

Mike Dobson, TeleMapics president, who writes about digital maps at www.telemapics.com, recently said that Uber was playing with fire by bidding on HERE because they were clearly concerned about autonomous vehicles. “Within 10 years, Uber will be producing its own fleet of [autonomous vehicles]. While owning a map company might be beneficial to them, they might be better off licensing map databases,” he said.

Uber, which bought mapping company deCarta and Microsoft’s Bing Maps, ultimately withdrew from the bidding war for Here.

City Built for Autonomous Testing Unveiled in Michigan

A 32-acre simulated city recently opened to test how self-diving cars will perform in the future. The $10 million facility, called Mcity and located on the north campus of the University of Michigan, was created by the school’s Mobility Transformation Center and the Transportation Research Institute.

With all the bells and whistles — a bridge, a tunnel, traffic circle, etc. — the facility will rival anything existing, if it hasn’t already surpassed it, in Silicon Valley or Pittsburgh, which seem to be the centers of gravity for the nascent autonomous vehicle industry.

Mcity, which was a government-industry partnership, plans to “lay the foundations for a commercially viable ecosystem of connected and automated mobility,” said a university press release. [Editor’s note: It is refreshing to see the “commercially viable” thrown in there by an academic institution.]

Another key goal is to implement a connected and automated mobility system on the streets of southeastern Michigan by 2021. The MTC is developing deployments of more than 20,000 cars, trucks and buses across southeastern Michigan, serving as testbeds for evaluating consumer behavior and exploring market opportunities, the university said.

At the same time as the Mcity announcement, also in Ann Arbor, the Automated Vehicle Symposium, which is the largest autonomous vehicle conference, was being held at a local hotel. While the conference had such keynote speakers as Google’s Chris Urmson, and sponsors that included Denso and Uber, it still has the feel of this government/academic/technical conference — not unlike TRB or ITS America.

In fact, like many government meetings, the afternoon “breakout sessions” were closed off to the press. This leads to the question, with so many new, and expensive, autonomous vehicle conferences springing up, why isn’t there a single panel on the future worldwide market opportunity?

In other location news:

• IndoorAtlas signed a $3 million deal with South Korea’s SK Planet, a subsidiary of SK Telecom, to target the e-commerce market. IndoorAtlas’ investors include ST Planet and Chinese technology provider Baidu, which made a $10 million investment in the company.

• Nokia’s HERE mapping and location services business is developing a new global standard for contactless transport ticketing payments using Near Field Communications-enabled mobile phones. HERE announced the formation of the Open Mobile Ticketing Alliance, or OMTA, to help consumers purchase public transit ticket using a mobile app.

• HERE competitor TomTom continues to be a major force in vehicle monitoring and location, recently announcing its telematics division broke 500,000 subscribers. Overall, the company serve 36,000 customers, primarily in the European fleet market.