After months of speculation around the possible sale of HERE, Nokia has announced its intention to sell the mapping service to a consortium of German automotive companies – Audi, BMW Group, and Daimler – for an estimated €2.8bn.
HERE strengthens its automotive roots
In the months since Nokia announced that it was looking for buyers for HERE there has been much speculation around who might be looking to purchase the mapping unit. HERE was ranked second in Ovum’s Location Platform Index: Mapping & Navigation 2H 2014, behind Google, which emphasizes its strength as a digital mapping provider. The players that, it was suggested, might benefit from acquiring HERE included Facebook to Uber, both of which have made strides in the location-based service industry. However, HERE’s strong automotive roots and growing digital footprint make it an ideal fit for auto manufactures, which are under pressure to improve their digital offerings to compete with companies such as Google and Apple that are encroaching on the automotive space.
Auto manufacturers need to work closely with digital mapping service providers to create unique and valuable in-car experiences for their customers and leverage location to introduce efficiencies in car maintenance and safety. This would allow the auto makers to reduce their reliance on players such as Google and enable them to offer their consumers customized and unique in-car experiences.
HERE is expected to remain independent after the acquisition and to continue catering to a wide range of verticals beyond auto, including enterprise and consumer (its newest initiative). However, given the identity of HERE’s new owners there will no doubt be a strong push to ensure the growth of the automotive area of the business. If HERE is to maintain its leading position in the market it must continue working across the consumer, enterprise, and automotive verticals. The location-based services industry has reached an inflection point; it is rapidly moving away from basic navigation services toward sophisticated smart living services such as the connected car and the smart home. This process is outlined in Ovum’s report Location-Based Services: Moving Beyond Mapping To Encompass the Digital World. HERE is well placed to play a key role in the growth of the location industry if it can continue its current growth strategy.
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Neha Dharia, Senior Analyst, Consumer Services