While at first the joint collaboration would appear to indicate that automakers see a potential for location-based services to become a new revenue stream, which they do, something else is also going on here. The real push and urgency to acquire Nokia’s mapping has everything to do with self-driving cars.
Nokia Here, the most advanced digital map of the world’s major road networks, will be essential to autonomous vehicles getting around and automakers know it. So automakers have a vested interested in obtaining the technology before it falls into the hands of the already all-mighty Google, which is testing its autonomous cars in California and Texas, Apple or even ride-sharing service Uber.
Back to the location-based revenue part of things, car makers also believe vehicles will eventually become a platform for generating income from location-based services that find nearby restaurants or parking garages, or to book hotels and other services that turn the data generated by the car into profits.
Nokia Here generated more than half its €970 million in 2014 sales from the auto industry, and the rest from location-based services. Nokia built the business out of Navteq, a mapping service that it bought in 2008 for $8.1 billion.
Photo Credit: Nokia