Should Google, Uber Worry About German Carmakers HERE Deal?


Google and Uber are now facing a challenge from German carmakers Audi, BMW and Daimler, who paid $3.1 billion or approx. 2.8 million euros to buy Nokia’s mapping segment HERE, says a report from Forbes by Parmy Olson. Using HERE’s unmatched technology, which apart from tracking routes between two points also indicates lane boundaries, car makers can reach new heights with in-car navigation.

German consortium must continue to invest in HERE

Nokia HERE is based on the technology of Navteq, an American mapping outfit acquired by the Finnish firm eight years ago for $8.1 billion. HERE is used by some of the world’s top automakers as a mapping technology. In a race to set themselves apart from the competition, car manufacturers are increasingly relying on in-dash navigation software and infotainment systems.

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Thilo Koslowski, VP and automotive practice leader at Gartner Research, expects automated cars that can park themselves or drive safely around limited areas to hit the markets in the next five years or so. The majority of such cars are expected to come from the German consortium and large tech firms such as Google, Apple and Uber, says the report.

Though the price paid by the German group for HERE is not that much, it is enough to reflect their intent to maintain their lead in the segment, and “critical tech assets should stay within the automotive industry.”

Google, Uber improving their self-driving technology

Despite the acquisition of HERE, Koslowski feels firms such as Uber and Google are still a threat in the self-driving space. Therefore, it is mandatory for the consortium to continue investing in HERE.

NASA’s Ames Research center in California is already already seeing Google’s self-driving electric prototype cars. Apple is also making efforts to develop its own mapping database, and is reportedly working on an autonomous car.

On the other hand, Uber, after withdrawing from HERE’s bidding process, bought a portion of Microsoft’s mapping unit last month. The company also set up a research center with Carnegie Mellon University to develop driverless cars.

Some analysts say the German group got HERE for a relative bargain. Recent developments in the segment have made the technology more accessible. Waze, the traffic & navigation app acquired by Google in 2013 for $1.1 billion, is an example of this trend.

“The industrial way of creating a map is becoming a little archaic,” says Koslowski. “That’s why I believe this acquisition will give this consortium a benefit in  timing, but it might be only a temporary benefit.”