Nokia's HERE Maps Sold For $3.2 Billion To Audi, BMW and Daimler

vivaoporto writes: Nokia announced an agreement to sell its HERE digital mapping and location services business to a consortium of leading automotive companies, comprising AUDI AG, BMW Group and Daimler AG (Mercedes brand owner). The transaction values HERE at €2.8 billion ($3.2 billion) with a normalized level of working capital, and is expected to close in the first quarter of 2016, subject to customary closing conditions and regulatory approvals. Once the mapping unit is sold, Nokia will consist of two businesses: Nokia Networks and Nokia Technologies. The first will continue to provide broadband services and infrastructure while the second will work on "advanced technology development and licensing." Reader jppiiroinen notes that Nokia originally acquired digital mapping provider Navteq in 2007 for $8.1 billion. Once it merged with Nokia, it became the foundation of Nokia's HERE unit.

Math...

[Anonymous Coward]

So... They managed to just lose 5 bilions in the deal !? Good move Nokia...

Re:

[padrejohn]

Thanks to Google Maps

Re:

[Luckyo]

Buying during boom vs buying during recession.

Re:

[Anonymous Coward]

Essentially yeah, but that map data was pretty likely very worthwhile for them during decline. Due to owning Navteq, they could put top-notch maps & navigation on pretty much every phone they made for marginal cost. Many bought Nokia phones primarily due to them, so if they didn't have those, the decline might have been way steeper and if they would have bought licenses from old Navteq, it would have been extremely expensive.

All in all, they likely manged to save way more than that 5 billion. They still

Re:

[jrumney]

For less than $5B, they could have hand-crafted individual maps for every customer, given how well their phones have been selling since they jumped into bed with Microsoft.

Re:

[Anonymous Coward]

Maybe after that, but for example in 2008-2010 they shipped total about 200 million smartphones (most of which had maps).

Business as usual

[Anonymous Coward]

8.1 to 3.2

Sounds about right when it comes to Finnish business :)

Offline Maps

[Luthair]

Hopefully this doesn't mean the death of the Here Maps Android application which allows you to easily download and nav without an internet connection.

Re:

[Bob the Super Hamste]

You could use Navit and use the extracted data from [navit-project.org]OSM [openstreetmap.or]. There is even a tool provided by Navit [navit-project.org] to download the map data you want.

Re:

[lexman098]

Google Maps will do this soon [androidcentral.com] if not already

Good move Nokia

[140Mandak262Jamuna]

The maps business is useless now. Even mighty Apple could not dislodge the king of the hill of the map Google maps. So it was facing an 8.1 billion write off. Somehow managed to dress it up to be sold to the auto giants for 3.2 billion.

The auto giants are in their typical auto giant mentality. "Ha, ha, haa, this chump has plunked down 25, 35 or 45 K to buy our car right? Now we can squeeze him dry. Want a nicely integrated map/system with the car audio and built in screen? That is special-nav package 3200$ for you. And we will stick you up for 200$ a year for map upgrades".

Google on the other hand gives me traffic update that is so granular and so up to date it boggles ones mind how they do it. Google paints the highways yellow, green or red, each section between exits gets independent updates. Last week, there was an accident in a non freeway some three lights ahead of us. The google map clearly showed the backup exactly up to the point, told us there is an accident ahead. It seems to be using some real time data about the number of cell phones passing in and out cell towers to determine the backup. Against this, goes our European wonders who bought Chrysler for 36 billion dollars and then sold it to Fiat for 6 billion dollars!

Google/Android is working towards an integrated auto-infotainment system standard. Apple is muscling in. Once the standards are published by SAE it is curtains for the auto industry selling GPS system at 2000% markup.

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[Lumpy]

TeleAtlas kicks Google's butt in maps.

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[NJRoadfan]

TeleAtlas was purchased by TomTom years ago.

Re:

[swb]

I'd see this less as a chance to charge more than a means of charging less.

With all smartphones offering great real-time navigation, it's a lot harder to upsell an expensive nav package for most cars. Even cars without nav seem to have basically the same touch screen even if the nav software is turned off. It's just economies of scale in production and assembly.

I think makers are looking to both improve what they have and make it cheaper and/or standard. And considering the consortium that bought them, t

Re:Good move Nokia

[Maximalist]

Google owns Waze now. I think that is where the live real-time traffic data is coming from.

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[kaiser423]

They had real time traffic long before the Waze acquisition. You do now see Waze-like markers in Google maps for accidents and similar now though.

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[Overzeetop]

Before waze it was limited to major metros afaik. Waze data has filtered in to make it much more distributed.

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[thegarbz]

Real time traffic comes from location tracking. They are quite open about this and it's one of the reasons I don't disable the function.

Re:Good move Nokia

[GGardner]

I think car manufacturers are less worried about the death of their navigation cash cow than they are terrified about not owning the magic google self-driving autopilot. Having your own map data is one component to the self-driving, or assisted-driving cars.

Daimler did not sell Chrysler to Fiat

[sjbe]

Against this, goes our European wonders who bought Chrysler for 36 billion dollars and then sold it to Fiat for 6 billion dollars!

Daimler did not sell Chrysler to Fiat. They bought Chrysler in 1998 for $38 billion. They sold Chrysler to Cerebus Capital Management in 2007. Fiat bought their interest in Chrysler in 2009 alongside the bankruptcy and they did not acquire a majority interest until fairly recently.

Google/Android is working towards an integrated auto-infotainment system standard. Apple is muscling in. Once the standards are published by SAE it is curtains for the auto industry selling GPS system at 2000% markup.

I can assure you that they've never managed to sell a GPS system "at 2000% markup" even though the price does seem outrageous. To understand why you have to understand product costing in the auto industry. The auto industry does not do huge volumes of consumer electronics like GPS systems. This means their unit prices are rather high. Furthermore each GPS system is to a non-trivial degree customized for the vehicle it is going into which makes the price quite a lot higher. This means that that $2000 GPS option actually probably costs a substantial percentage of that price because they don't sell enough of them to get the cost down lower.

My company makes parts that go into some of the custom wiring harnesses for things like this. Best case they are probably making about a 2-3X markup on the GPS option depending on the volume of the vehicle it goes on. Chances are good they are making less than that especially if it is standard equipment. Remember that even the most profitable auto manufacturer in the world (currently Porsche) has something like 10% net profit margins. So no they aren't making "2000% markup" on pretty much anything.

If you want to know what a part really costs to make, go to your automotive dealer and see what price they are selling it for as a service part. As a crude rule of thumb the markup from manufacturers cost is usually around 6-8X. So for example my company sells a wire harness to our OEM customer for about $2. If you could buy that harness from your GM dealer it would probably cost you about $35-55 retail. Basically the harness goes through somewhere between 2 and 5 suppliers and each one marks it up by around 10-30% along the way. Then when the dealer gets it they basically double whatever price they paid for it (sometimes more) which gets you to a roughly 6-8X the original cost to build.

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[LWATCDR]

" Furthermore each GPS system is to a non-trivial degree customized for the vehicle it is going into which makes the price quite a lot higher. "
That is a bad choice on their part.
Make them fit a standard double DIN and use custom surrounds to make them fit with the car better. Standard CAN interfaces could allow the Infotainment system interface with other systems like climate control and extra displays.
Use a OS like QNX, Linux/Android and just write an app for your make of car. Cortex A15s are cheap as is

Bad engineering choices

[sjbe]

That is a bad choice on their part.

No argument from me. I make wiring harness that go into automobiles (among other things) for a living. The amount of useless customization and non-standard parts used would make your head explode. For example one of the parts we make uses a custom wire, had two custom connectors designed for it, and uses two different grommets because the engineers for cars in the same family couldn't be bothered to talk to each other to commonize a hole size. This means that the price is probably 50% higher than necess

Re:

[Grishnakh]

GM engineers are famous for their complete incompetence. Just look at the ignition-key fiasco. There's no way in hell I'd buy a GM. I even thought about it once; I thought that a few decades was enough to forgive them for their past atrocities in automobiles, and that their new cars were worth taking a look at again, and then the ignition-key fiasco came up in the news. That was the end of that idea.

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[Karlt1]

Even mighty Apple could not dislodge the king of the hill of the map Google maps.

Apple already has "dislodged" Google Maps on Apple devices....

http://fortune.com/2015/06/16/... [fortune.com]

"At WWDC last week Apple announced that it receives 5 billion requests per week for its mapping services and that Apple Maps is used 3.5 times more frequently than âoethe next leading maps appââ"i.e. Google Maps."

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[mjwx]

Even mighty Apple could not dislodge the king of the hill of the map Google maps.

Apple already has "dislodged" Google Maps on Apple devices....

http://fortune.com/2015/06/16/... [fortune.com]

"At WWDC last week Apple announced that it receives 5 billion requests per week for its mapping services and that Apple Maps is used 3.5 times more frequently than âoethe next leading maps appââ"i.e. Google Maps."

on IOS only.

And lets face it, Apple users are used to being lost. I think between all platforms Google will be receiving more than 5 billion requests per day. 5 billion requests is only 5 requests per Android user.

I tried to use Apple Maps for the first time in 2 years the other day. It still cant find basic landmarks like train stations here in Perth. Not like the state government makes that information free to anyone who wants to contact Landgate for it or anything.

Also, if you could provide an a

Re: Good move Nokia

[Karlt1]

"Mighty Apple" was never trying to dislodge Google maps on non-IOS devices. Which should be obvious given the fact that there is no Android version of Apple maps.

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[justaguy516]

Is there a BT profile whereby my smartphone can connect to the audiotainment system and use the screen to render maps? Because that would be awesome.

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[Grishnakh]

I use both; Google on my phone and HERE on my car's built-in nav unit. Being able to use the car's system where there's no or poor cell coverage is definitely a big plus. However, the HERE data is old and incomplete as far as businesses. If you know the street address of where you want to go, it's great. However, if you just want to look up all the Walmarts nearby and pick one to go to, it tries to direct me to one that's an hour away for some odd reason. And forget about finding some small restaurant;

Well that just stinks

[The-Ixian]

I don't own a car and I rely on public transportation.

HERE maps have been the most useful bus scheduling app out of any I have tried.

I was really hoping that MS would buy them in order to strengthen their Bing maps business.

Buy High Sell Low

[Craig Cruden]

That is the key to a long and successful company :o

Oh wait... sorry backwards.... I guess that is why they are dissolving the company....

Easiest way to become a millionaire

[Overzeetop]

Start off as a billionaire and keep spending until you get to the goal you set.

Here, there, and everywhere

[maggard]

When Nokia bought Navteq they bought one of two global mapping companies, for about US$ 7.5 billion. For that they got, almost immediately, free maps for every Nokia handset. Around the planet. Also data sets for some industry leading augmented reality. Those services were, and are, huge. They sold lots of handsets and led the way to lots of Microsoft collaboration (Windows Phone et al comes with Nokia Here built-in.) That eventually led to Microsoft buying the phone unit outright. Did Nokia lose money selling Here off? Maybe, maybe not. They sold lots of handsets around the world featuring Here. That augmented reality wowed lots of folks and sold some more, plus positioned Nokia products as forward looking. They sold some online mapping to websites, though that was probably not a big revenue stream. They eventually sold the failing phone unit (and kept Here!) So they got a lot of milage out of Here, maybe US$5 billion. Going forward, I hope the new owners keep the consumer editions of Here. I'm off to Glacier Nat'l Park next week, and have Here loaded on all my handsets. The iPhone has just the states I regularly visit preloaded. One of my Android handsets has all of North & Central Americas preloaded, for fast travel convenience. I'm used to sering legions of befuddled tourists wandering around national park attractions confused their smartphone maps (Google Maps & Apple Maps, both largely dependant on streaming maps) aren't working. I used to bring a Windows phone along explicitly for those situations, now I just load Here. Oh, and why not carry a dedicated GPS unit? They don't come with cameras, translators, phones, email, etc. Their maps? Likely sourced from, yes, Here.

What's their in here?

[Nexus7]

Wasn't there a post saying Apple and BMW are cozying up? And doesn't Apple have its own maps thing? So why is BMW in this purchase? Are these automobile manufacturers just making sure they're not single-sourced for anything - be it Os or maps?