BMW, Audi and Daimler Buy Nokia HERE

Nokia announced it has agreed to sell its HERE mapping business to a consortium of German automakers for $3.07 billion, after months of speculation over its sale.

Since Nokia completed the sale of its devices business to Microsoft last year, the future of HERE has been up in the air. In April of this year, Nokia confirmed it was reviewing options for HERE, with one of the potential outcomes being a sale. Now, the Finnish company has confirmed that it will be handing over the mapping business to Audi AG, BMW Group and Daimler AG (Mercedes), in a deal that is expected to close in the first quarter of 2016.

There was a great deal of speculation about the interest in buying HERE from a variety of different companies around the world. In addition to the auto companies, a joint bid from Uber and its investor Baidu was highly speculated, while there were also rumors that interest in purchasing HERE was expressed by China’s Navinfo as well as by Amazon, Alibaba, Facebook and Apple.

The interest in HERE was so vast because the power of the mapping and location services business could make a massive difference in the future of mobility and location-based services. For the auto industry, this is the basis for new assistance systems and ultimately for fully autonomous driving. Extremely precise digital maps will be used by the automakers in combination with real-time vehicle data to increase road safety and to facilitate the development of innovative new products and services.

“HERE will play a key role in the digital revolution of mobility, combining high definition maps and data from vehicles to make travel safer and easier for everyone,” said Harald Kruger, chairman of the Board of Management of BMW AG.

Digital mapping is part of an array of digital technologies on which automakers are now making big investments. The members of the German consortium say they will use Nokia’s digital mapping unit for their own autonomous driving plans, but that they would also be willing to license the technology to other companies.

“Our environment is constantly changing,” wrote Rupert Stadler, Audi’s chairman, in a statement. “That’s why the information in digital maps has to be continually updated so that maximum utility can be offered.”

The three automakers have taken an equal share in Nokia’s mapping unit, and the companies said that they will continue to run HERE as a separate business. It’s important to note that there are other tech giants, including Amazon, Baidu and Facebook that rely on Nokia’s geospatial data for their mapping services. These companies had turned to HERE to reduce their reliance on Google, a company that they increasingly compete with for users, engineers and advertising revenue.

“High-precision digital maps are a crucial component of the mobility of the future,” said Dieter Zetsche, chairman of the Board of Management of Daimler AG. “With the joint acquisition of HERE, we want to secure the independence of this central service for all vehicle manufacturers, suppliers and customers in other industries.”

Now, it will be up to the German automakers to convince these tech companies they can continue to deliver the same level of digital mapping services that has made Nokia’s unit the primary global rival to Google Maps.