Nokia HERE, its mapping and location businesses, might be worth more than the former handset giant thought, as rival companies talk up the value, and a consortium of car companies square up to an alliance of Uber and China’s Baidu.
Nokia bought Navteq for $8.1bn and renamed it HERE, and then fell on hard times and sold its phone business to Microsoft (you know the story). That left HERE as a bit of an odd possession for a company which makes mobile phone network infrastructure.
When Nokia bought Alcatel-Lucent, the company said “Nokia has initiated a review of strategic options for its HERE business”, which meant that it was casting around for someone with about €2bn to buy the business.
The company later seemed to change its mind, saying that a strategic review would not necessarily lead to a sale.
However, Reuters reports that simple industry competition could force the price above previous estimates, claiming the front-runner is a consortium of Mercedes, Audi and BMW, backed by private equity firm General Atlantic.
The value of the maps is what it would cost to create them, and what they can be sold for. The cost of creating maps has tumbled since the Navteq deal, with more technology in the hands of mapmakers.
The revenue stream has also been under pressure, as users expect them to be free.
One industry executive, who asked not to be named, told El Reg: “They were and still are an excellent company but it’s getting tough”.
Commercial users – such as Uber and the car manufacturers – have to pay licence fees, however, and a one-time purchase of HERE could reduce the costs in the long term, leading to speculation that the eventual price for the mapping division could even top €6bn. ®