It’s not often you see Germany’s hotly competitive carmakers joining forces, but with the advent of Google’s self-driving cars the stakes are high enough for them to make it happen.
BMW, Daimler’s Mercedes-Benz and Audi are preparing to launch a formal bid for Nokia’s comprehensive mapping service HERE within the next two weeks, which could value the division at more than 2 billion euros ($2.3 billion) according to a report in The Wall Street Journal.
The goal: beef up their own self-driving car projects with one of most accurate mapping services in the world, and face the threat of Google’s forthcoming business head on.
One of the biggest worries on the part of the carmakers, according to The Journal, is that Google will eventually create an open-source operating system for self-driving cars that’s free for any other car manufacturer to use, as it has done for mobile phone vendors with Android.
The talks between the carmakers and HERE, which makes up one of three remaining divisions at Nokia after the company sold its mobile handset division to Microsoft last year, have reportedly reached an advanced stage. Details over price and the divvying up of HERE's stakes are still up in the air.
Chinese search giant Baidu reportedly makes up a fourth suitor joining the car-making consortium, and is seeking a minority stake along with one other unknown financial investor.
Baidu may seem like an odd addition to the group, but its interest may come from a reported intention to create a high-definition map of China, something Google has been officially banned from doing itself.
HERE already powers Baidu’s maps for regions outside China, to be used by Chinese users who travel abroad, so the two companies already have a partnership.
That in mind, Nokia is an enviably good position for playing potential buyers for HERE against one another, since it already partners with so many large corporate customers in the technology business.
While HERE is available for consumers through apps for Android and iPhone, Nokia primarily makes money from the division by selling subscriptions to companies like Amazon, which uses the mapping service for its Kindle Fire tablet, Garmin and automakers.
Around 80% of cars that have an in-car navigation system on the dashboard use HERE’s maps, HERE CEO Michael Halbherr told Forbes in an interview before he stepped down as head of the division in late 2014. That year HERE had reported a 15% increase in annual sales and Halbherr described the unit as “self sufficient.”
HERE is made up of 6,000 employees in more than 200 field offices, who run everything from data gathering and platform services, to licensing and aerial photography.
The unit has been working with the self-driving teams of automotive companies for several years now, pushing its ultra-precise cartography as a unique selling point against competitors.
For the last year or so it has been pushing the creation of 3D mapping models.
“The new maps will be a complete recreation of reality, using lasers to create 3D models,” said Halbherr, who added that HERE was indexing the real world in the same way Google had indexed the web and Facebook had indexed a vast social network.
