Three German Automakers Join together to Buy Nokia’s HERE Maps… But Why?
Three majorGerman automakers — although competitors — have joined together to acquire Nokia’s HERE maping business.
WSJ today (August 3, 2015) announced the following:
Germany’s biggest auto makers have clinched a deal to buy Nokia Corp.’s digital mapping business, beating out rival bidders for some of the vital technology for self-driving cars in a €2.8 billion ($3.1 billion) acquisition.
The three automakers released the following statement:
The acquisition is intended to secure the long-term availability of Here’s products and services as an open, independent and value-creating platform for cloud-based maps and other mobility services accessible to all customers from the automotive industry and other sectors.
Just few weeks before, Daimler CEO, Dieter Zetsche had remarked that his company was interested in acquiring the HERE maps for security reasons and that Daimler has “the goal of designing security into the software” and making the platform available to ‘third-party competitors.”
This move by the three German automakers is interesting for reasons beyond the maps. This is part of long arc of transformation in the digital transformation of the automotive sector underway beginning with simple telematics services introduced by GM with OnStar in 1996. Over the last few years, we have seen Apple and Google jockey into the automotive sector by extending their mobile operating systems.
Google is orchestrating the Open Automotive Alliance with Android at the core and Apple has invited the automakers to be part of its CarPlay initiative.
Google has also tested its self-driving cars and is poised to be a major influence in the auto sector by the end of this decade.
So, why did the three leading German automakers buy Nokia’s HERE based in Berlin? It is more than a nationalistic move to protect German mapping competencies. It is about acquiring a key part of the digital business architecture needed for the future of the automotive sector.
We have already seen important announcement from the German automakers that show their recognition of the importance of digital technologies.
Daimler showcased its version of autonomous driving — Luxury in Motion Automobile F015 at CES in January 2015.
Audi has its own views on how digital technologies could help driver that it labels as “Piloted Driving.”
BMW 7 Series can park itself — thereby showing how BMW has incorporated some essential ideas from autonomous driving technology into the current generation cars.
The battle for the digital business architecture of the automotive industry is just getting started. It is not just about the design of cars in the factories but understanding how the cars perform on the road in use. These three car manufacturers recognize that they might have been fierce competitors in the past. The future automotive industry is much broader and complex than the past — especially with Google and Apple hinting at serious and substantive moves. Then there are other companies — Uber, Tesla — whose moves also could influence the future shape of value delivered to individuals and fleets.
This 3 billion euro purchase is significant but one in a series of bigger investments and interconnections between the automotive industry and the information and communication technology sector. We will see the automotive sector in the very near future characterized by fierce competition but also friendly cooperation.
The automakers also know that acquiring Nokia’s HERE maps is only a small part of the competencies needed to win in the future.
