The Future is HERE & Brighter For The Location Industry

Nokia today announced the sale of its HERE location and mapping business unit to a Consortium formed by German Automaker BMW-Audi-Daimler for EUR 2.8 Billion (or US$ 3.1 billion). This is a huge event in the global location, mapping space as makes HERE an independent company to challenge Google stronger by becoming the go-to platform by any tech industry player for its location intelligence and mapping needs. HERE can now get into “investment” mode with richer, focused and aligned parent shareholder consortium.

What does it mean for Nokia?

  • For Nokia, it was a tough decision to let go the precious and highly potential HERE business unit as location, mapping is the future of mobility.
  • Though this was a much needed move for Nokia as it pivots into a pure “network and technology” company in light of recent acquisition of Alcatel Lucent after selling the Devices & Services business unit to Microsoft
  • Nokia Networks & Technologies units contributed to almost 91% of the total Nokia revenues and  85% of the total operating profits, making it difficult for Nokia to justify a further more investment in HERE division if the world’s leading mapping unit wanted to scale up.
  • So this sale frees both Nokia as well as HERE from the shackles which were preventing HERE to shift gears from a maintenance mode to an investment mode to scale up further.

What does it mean for HERE and its existing and prospective customers?

  • For HERE, this strategic sale from Nokia to the actual customers/partners in form of the advanced German automaker consortium is the game-changing moment for HERE as well as location and mapping industry
  • HERE aims to remain an independent and horizontal company moving forward as it has been with only change being the shareholders are richer, open minded and aligned to the same goal of building a cutting-edge mapping and location software and services platform
  • HERE comprises of three business units catering to different segments – Automotive (B2B & B2B2C), Enterprise (B2B) and Consumer (B2C & B2B2C) and will continue to cater to all of these segments moving forwardHERE business units
  • HERE’s current revenues in “maintenance mode” rather than “investment mode” under Nokia had been at US$1.2 Billion per annum run rate and we estimate it to grow further once HERE shifts gears into investment mode building meaningful as well as innovative services on top of the platform moving up the location stack to attract more opportunities and thus enter high-scale and high-growth mode
  • There will be a distinct firewall between the consortium shareholders and HERE as a company to protect the interest of its current and future customers, which makes it well positioned to scale and drive the top and bottom lines
  • HERE’s current huge roster of clients will thus immensely benefit from the acquisition as HERE as a preferred partner develops into a much more innovative and beefed up platform

HERE Clients

What does it mean for the Consortium & Auto Industry?

  • German automakers consortium have pledged to keep the HERE an independent and horizontal company
  • Buying it from Nokia was the masterstroke in order to protect HERE, the only pure horizontal and leading mapping platform globally from being acquired by the internet (e.g. Uber, Facebook) or hardware companies (e.g. Apple, Samsung) with primary business models either “customer data, advertising” driven or highly “vertical” which could devoid the entire industry of high quality maps and location platform
  • For German automakers, this is a great long term investment, as the HERE with its capabilities can scale up to win not only to drive digital revolution in mobility space but also powering intelligent location needs for billions of future IoT devices as well as associated Big Data opportunities in the next Big Information era
  • The HERE platform will definitely be more important and well-aligned to offer unparalleled insights and information to global automakers, device makers, software and app providers, suppliers and other value chain members leveraging the huge volume of anonymized location-centric data from HERE powered digital dashboard, sensors or location based services integrated in the ‘mobility-centric’ devices such as vehicles, smartphones, wearables and so forth.
  • This will help these players improve their products or offerings with timely intelligence and in some specific segments such as “highly automated driving” this will help precisely guide using its predictive analytics engine on traffic conditions, vehicle diagnostics, future road-related warnings, hazards significantly driving down the risk of accidents

HERE volume 2

  • Scaling up HERE location intelligence platform equipped with location based software and services as well as data analytics engine across the industries will be the key goal of consortium in order to derive ROI

In summary, a great moment for the technology industry as the world’s leading location mapping software and intelligence platform HERE is now completely independent, horizontal to drive the industry forward with a greater degree of freedom to innovate and further build its platform. The bird is out of the cage and free to fly high.


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