Innovations Await as Audi, BMW, Mercedes-Benz Buys Nokia HERE
Germany is about to enter a race that has long been dominated by Google-not search, but maps.
In a move that can only mean good things for us, the German trio Audi, BMW, and Mercedes-Benz recently got the green light from the United States Federal Trade Commission to buy HERE, Nokia's maps business.
Many of us want our cars to be smarter and our phones more integrated into other products. This purchase may very well do that, as the three car makers will likely use their technologies to improve HERE and their vehicles.
Germany's Big Three won the US antitrust approval, announced on September 2, 2015. The purchase was first announced in early August.
Luxury Cars and Maps
Audi AG, BMW AG, and Daimler AG (the parent company of Mercedes-Benz) have agreed to buy Nokia Oyj's digital map unit for US $2.8 billion (2.5 billion euros), the FTC said. The deal had little speed bumps going through the FTC as it was an uncontroversial transaction.
The three luxury car makers will hold equal stakes in HERE. This purchase opens new innovation and revenue lanes for the automakers. It wouldn't be surprising if we see offers of new premium features from the three car brands soon.
For the Big Three, they can easily streamline operations by changing the status quo in luxury car brands, switching parts suppliers, and challenging software rivals. This also means the automakers can reduce their future reliance on third-party tech pieces from providers like Apple or Google.
The transaction is expected to be completed early 2016 and is seen as a push by the German companies to develop self-driving systems independent of tech giants like Google, Inc. This could only mean good things for us consumers.
Maps Accuracy and a Growing Market
The purchase could be a sign that automakers are gearing up for huge growth opportunities in autonomous driving and connectivity. The three luxury car brands have been working with HERE for maps for some time now, so they know its quality of service.
By supplying the maps technology to other carmakers, the German Big Three can tap into the automotive data and connectivity market that is estimated to be worth US $201 billion (180 billion euros) by 2020.
What makes HERE a hit among users is its feature of being accurate to as little as 4 inches (10 centimeters)-an accuracy level that's crucial as cars are becoming more self-guiding. In this age when everything is connected to our smartphones, we want our maps services to be sophisticated enough to help us not only with directions, but in automated driving as well. And that's what HERE aims for down the road.
Last year, almost 17 million vehicles around the world were manufactured with built-in navigation systems. That figure is expected to go up, over 25 million by 2021, according to industry estimates.
When Automobiles and Technology Collide
The purchase is all about the race for data. The car companies are being proactive when it concerns maps and assistive driving technology so that when we do get self-driving cars, they don't have to rely on Silicon Valley companies.
While Google Maps and HERE are quite similar in layout, the Nokia service has the newer, fresher look. Google Maps takes the lead when it comes to the variety of information provided, as it offers information on traffic, transportation options, bike paths, terrain, and even satellite images. The Nokia service, however, features exceptional images taken by satellite.
Overall, HERE still has a long way to go before it can edge out Google Maps, but with the technology, research, and the resources of Audi, BMW, and Mercedes-Benz combined, it's not hard to imagine that it can go head to head with Google in the near future.
For now, we can just sit in the backseat and wait for the innovations that are sure to improve driving experience. Whatever they come up with, it can only mean good things for us consumers.