Nokia has agreed to sell its mapping business to a consortium of German automakers as the race between car companies and Silicon Valley to build and deliver self-driving vehicles intensifies.
The 2.8 billion euro ($3.1 billion) deal announced today is a coup for BMW, Audi, and Mercedes-Benz, which beat out rival bidders to gain navigation technology that built from years of research and development—not to mention Nokia’s $8.1 billion acquisition in 2007 of Navteq, a Chicago-based digital mapping and navigation business. The automakers said they will each own an equal stake in Nokia’s mapping division, known as HERE, and none will seek to acquire a majority interest. They expect the deal to close by the first quarter of 2016, subject to antitrust approval.
Collecting mapping data is no simple business, as Nokia HERE lead designer Peter Skillman told WIRED last year. HERE collects data at a rate of 100 billion points per month, Skillman said. Data sources include satellite and aerial imagery; anonymized “probe data” from GPS devices inside fleet vehicles owned by trucking companies; and hundreds of cars operated by HERE itself, outfitted with all kinds of sensors, from GPS and cameras to LIDAR, a laser-based method for measuring distances.
Automakers need this kind of mapping data that human drivers hardly ever think about—things like the precise location of lane markers and curbs, the height of traffic lights, and what every traffic sign says—so that their self-driving cars can focus their sensors and computing power on obstacles that are right in front of them, such as cars, pedestrians, and cyclists. At least as importantly, consumers expect any new car—self-driving or not—to come with a powerful navigation unit, which HERE makes possible.
Along with saving the car companies the work of creating their own maps, the acquisition keeps the technology out of the hands of players such as ride-hailing giant Uber, which was reportedly one of the bidders for HERE, as well as Google, whose own driverless car project puts it in potential competition with traditional automakers. Apple has also been sending out vehicles to collect its own mapping data, a logistically intensive effort that the automakers appear to have sidestepped with the HERE acquisition.
For Nokia, meanwhile, the sale is one more step as it seeks to find its footing as a company. Once one of the top mobile phone makers in the world, Nokia sold its handset business to Microsoft last year (which didn’t work out so well). Now, the company is focusing on making telecom equipment for the world’s biggest carriers, such as AT&T and China Mobile. The sale of Nokia HERE comes as the Finnish company closes in on its $16.6 billion acquisition of the French-American telecom equipment maker Alcatel-Lucent. Now it would seem to have a little more cash to put on the table.