HELSINKI: Nokia confirmed on Monday that it has agreed to sell its digital mapping and location service unit HERE to an automotive consortium consisting of Audi, BMW and Daimler for an enterprise value of 2.8 billion euros.
The technology and software used by the automotive industry are undergoing significant changes. The importance of navigation systems is set to increase as a number of automotive manufacturers are developing self-driving vehicles. At present, digital maps are used in a wide variety of mobile applications and the on-board computers of vehicles.
“The growth potential of HERE arises from the growing popularity of on-board navigation systems. The standard today is to have a radio, but that is about to change for good. Navigation systems will be the new standard,” predicts Mikael Rautanen, an equity analyst at Inderes. He believes Nokia may yet come to regret the sale. “If you look at where the technology and software used by the car industry are heading, you may start to regret the sale price ten years from now,” he says.
Hannu Rauhala, a senior analyst at Pohjola Bank, is confident that the timing of the sale was considered carefully. “Car manufacturers are currently considering how to participate in the development of service concepts for smart cars. Nokia is aware of that. They’re preparing for the future,” he analyses.
