Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s HERE, the mapping data provider that seemed poised to take advantage of the exploding location services market may simply be pushed out of the market by mobile platforms that prefer to develop their own assets, but that doesn’t mean the service doesn’t have any growth prospects.

Nokia HERE’s future

“The future of independent map data providers is uncertain. Most of the demand for mapping data is controlled by mobile platforms, for which Location Services have become a strategic priority,” writes Bernstein Research senior analyst Pierre Ferragu.

In the past, the two largest players in the map data sector were TeleAtlas and Navteq, which Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) bought for $8 billion in 2007. By then it was already clear that location services would become an important part of the smartphone market, but it wasn’t obvious that two platforms would come to completely dominate that market (with the Windows Phone creating a smaller third alternative, and BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) on its way out the door).

Value chain shift

Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) have taken control of location services, relegating companies like TeleAtlas to licensing deals with few prospects for growth. Ferragu says that this is such a perfect example of a value chain shift that it should be used by business schools to drive the concept home, depicted in two charts from 2007 and 2012.

Nokia HERE value chain shift

Ferragu values HERE at no more than $1 billion and he doesn’t think that it will be a significant driver in the firm’s share price. That doesn’t mean he’s bearish on the stock. HERE, like Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s IP portfolio, will provide the company with a stable or slowly declining source of revenue that it can either invest in new ventures or pass on to investors.

Nokia HERE undervalued

Analysts at Societe Generale have argued that HERE is actually an undervalued asset because the mobile space has never been its main target. Instead, they argue that HERE gets most of its income from in-dash auto navigation applications, and that its earnings correlate with new car sales, which have been surging this year. Even if it can’t compete in the smartphone space, HERE could provide Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) stocks with some upside by exposing investors to the recovering auto sector.