USA Today
German luxury car brands, Uber and one of China's largest search engines are among the bidders for Nokia's digital mapping business that is a key piece of the self-driving car puzzle.
Nokia, the Finnish telecom giant, has been trying to sell its HERE mapping unit since mid-April. Bidding is now in a second round. The winner could grab a strategic edge in defining what is expected to be the auto industry's most disruptive change since the internal combustion engine replaced horses.
There are three known bidding groups. One is a partnership of Uber, Baidu, the Chinese seach engine, and private equity firm Apax Partners. HERE already has an agreement with Baidu to power its map services outside of China.
BMW, Daimler and Audi have teamed up for a second bid, while a third bid came from the trio of China's Tencent Holdings, NavInfo and Swedish buyout firm EQT Partners have presented a third offer.
Microsoft, which last year bought Nokia's phone business for $7.3 billion, reportedly has expressed interest in buying a minority stake in the Nokia unit.
About four of every five in-vehicle navigation systems use HERE's maps, CEO Michael Halbherr told Forbes magazine last year.
So why does Nokia want to sell it ?
Earlier this year Nokia acquired Alcatel-Lucent, the French telecom competitor. The mapping unit is not part of Nokia's main business of supplying equipment and software to network operators,
"HERE is definitely a very big piece of technology," said Jeremy Carlson, IHS Automotive senior analyst. "Even if you look at two-dimensional maps on Google maps or Bing, there's more providers of those maps. But the ones with extensive detail are harder to create."
HERE's maps don't just show you how to get to your next business appointment.
They are much higher resolution. They are accurate down to a few inches, because they need to keep vehicles within their proper lanes and prevent them from turning onto curbs, not to mention avoiding construction barrels and peduestrains.
Nokia's teams drive vehicles packed with sensors, cameras, lasers and other devices to map the lane and shoulder markers, nearby buildings, stop signs, traffic lights, surrounding vehicles, curbs and traffic cones.
"GPS (Global Positioning Satellites) alone doesn't solve the problem," said Ryan Eustice, a University of Michigan engineering professor who has worked on autonomous vehicle development for both surface and underwater devices. "Nokia HERE's maps have a high-level of human input. They use a lot of programmers in India."
Uber wants the mapping expertise because it could reduce or eliminate the need for drivers. The German luxury automakers see a way to be independent from Google, which may soon be a competitor.
Whoever ends up owning HERE can charge licensing fees to other companies who need the maps. But there's considerable maintenance required.
"You have to update these maps because roads change pretty frequently," said IHS's Carlson. "The barrier to getting to this point is really pretty high."
HERE has about 6,000 employees across 200 field offices where they drive the mapping vehicles, gather data, process licensing requests and conduct aerial photography.
No U.S. or Japanese-based automaker is bidding for HERE, but that doesn't mean they're not exploring other high-resolution mapping options.
There's also a chance Nokia will decide to keep the business. The bidding has proven it may be worth more than originally thought.