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Nokia pitches maps as Google antidote in $3 billion sale push

24 April 2015 18:20 (UTC+04:00)
Nokia pitches maps as Google antidote in $3 billion sale push

By Bloomberg

As Nokia Oyj pushes to sell its map business HERE, one message to clients and suitors alike is clear: the unit’s not going to siphon off data like Google Inc.

HERE’s software vies with Google for supporting vehicle navigation systems and eventually guiding self-driving cars. Google may want to use that position to layer its own advertising services on top. By contrast, HERE is focused solely on the maps, said Floris van de Klashorst, head of the unit’s connected-driving projects.

“When we talk to our customers, we offer something -- an asset, a map, a platform, service, or application -- that helps them build their business,” van de Klashorst said over coffee in HERE’s offices a short walk from the Berlin Wall Memorial. “When they talk to Google, they are getting the ability to use an asset to help build Google’s business.”

For example, location data from different carmakers would be pooled to steer drivers around traffic jams, not to direct them to stores or restaurants that bought ads, as Google may eventually do. A Google spokesman in Germany didn’t immediately have a comment.

HERE’s argument sidesteps the fact that the unit’s unprofitable and has lost value since Nokia spent $8.1 billion to get into the business in 2008. The unit’s main source of revenue has been licensing fees, but producing a map that’s accurate to within as few as 10 centimeters (4 inches) is expensive. HERE has 200 mapmaking cars on the roads around the world and has hired more than 300 developers in the past year, van de Klashorst said.

Strategic Review

The sales pitch is in tune with sentiments voiced by German carmakers, which are concerned that their vehicles will play second fiddle to Google’s platform. A group of automakers is among bidders for the asset, people familiar with the sales process have said. Nokia has also pitched it to some of the biggest technology companies, including Apple Inc., Alibaba Group Holding Ltd. and Amazon.com Inc., said the people, who asked not to be named because the talks are private.

Nokia is seeking more than 3 billion euros ($3.2 billion) from the sale, and first-round bids are due at the end of next week, one person said. HERE’s book value is about 2 billion euros, according to company filings.

HERE lets clients choose which components of the software they want to use, and they can also build their own programs on top of the platform, van de Klashorst said. The company wants to keep working with any interested partners no matter the outcome of the sale process, he said.

“I’m very excited by the broad interest,” he said. “The fact that they appreciate us for our vision and our assets is the most important conclusion for me.”

Blue Land Rover

A Berlin test ride in a bright blue Land Rover equipped with the unit’s latest software shows some of what the mapping unit has to offer. The Land Rover’s navigation system linked with a smartphone app to guide the driver to shopping center in north Berlin. The dashboard display then showed the streetscape at the destination, highlighting parking lots as the car neared.

The software can also learn drivers’ habits, such as picking up a coffee en route to work. What it couldn’t manage quite yet was finding street parking.

Though the corporate car was outfitted with a basic demo package, HERE and Jaguar Land Rover debuted the first customized version, in the Jaguar XF, earlier this month. And HERE said it’s also working with 10 carmakers on automated driving -- a project that Google has set its sights on as well.

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