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Nokia Seeks Higher Bids for Mapping Unit

05/22/2015 | 09:15am US/Eastern

Nokia said Friday it was in no rush to sell its mapping services, increasing pressure on a crowd of tech and automobile suitors to raise their bets for an asset seen as an essential piece of technology for the advent of self-driving cars.

Nokia Chief Executive Rajeev Suri said the unit, called Here, had attracted "significant interest" but appeared to be holding out for higher bids.

"Let's give it more time," the Finnish telecommunications-equipment giant's CEO was quoted as saying in an interview with the trade magazine European Communications. "We may not end up selling it if we don't get the right value. It has to be a good competitive deal for Nokia and our shareholders."

Whoever gets their hands on Here could determine who drives the next revolution in the automobile industry: the traditional car makers or the newly founded technology giants. That is because digital maps are the underlying navigation technology needed to enable cars to become self-driving and Here is considered the most advanced in this area.

Here's rivals includes TomTom NV, a Dutch company that makes navigation and mapping products, and Google Inc., which has its own Google Maps and other navigation products.

Nokia said it was conducting a strategic review of the unit on April 15, on the day when it laid out plans to buy Alcatel-Lucent SA. Since then, the Finnish company has been shopping it around to potential investors. They have tendered bids of more than $3 billion, valuing Here at a hefty premium to the $2.2 billion that Nokia recently said was the company's fair value.

Here, which has its main offices in Berlin and Chicago, was created on the basis of Navteq, a U.S. company Nokia bought for €5.7 billion ($6.3 billion) in 2008.

Among the group of private equity, technology and auto industry investors that have placed bids for the company, two key groups have emerged.

One is a consortium backed by German car makers BMW AG, Volkswagen AG's Audi unit, and Daimler AG. They are teamed up with the private equity investor General Atlantic, according to people familiar with the situation.

The car makers placed a bid with Nokia last week, according to two people familiar with the situation. These people said Nokia is expected to make a decision on existing bids in mid June.

Uber, a ride-sharing service company, which has teamed up with Baidu, China's largest search company, leads another group. Uber has offered to pay about $3 billion for Here, according to people familiar with the situation.

Analysts suggest that Uber could be interested in Here's mapping service to create fleets of robot taxis. Uber recently acquired deCarta, a location-based services company with its own mapping technology. Uber is also looking into developing an autonomous vehicle that it would use with its services.

Here has a product called HD Live Map that will become available in the second half of this year. It is the most advanced high-definition mapping service available and will be used in partially autonomous vehicles, so-called Advanced Driver Assistance Systems, which include such features as extended cruise control and automated parking.

Here is developing a system that learns from a person's driving habits, suggesting changes to routes based on driving patterns and offering detailed information from the local environment. If you search for a filling station, for example, you get a list of nearby stations arranged according to fuel prices.

The latest innovation allows a driver to map a route, sync the route in the Here cloud and follow it seamlessly on any smart device. When the car comes within 300 meters of its final destination, the first thing the navigation system does is start looking for parking and then directs the driver to a parking garage. If the driver needs to park far away from his final destination, he can park the car and then switch to following the map on his smart phone, which picks up the person's location and continues on foot.

Surveys show that car buyers are willing to pay more for such in-car digital services, which is forcing car makers to become more tech savvy.

"Car manufacturers have realized that they have to completely change their model; they need to become more software oriented and less hardware oriented," says Kevin Hamlin, senior analyst for connected cars at IHS Automotive.

There were 17 million cars produced with on-board navigation systems in 2014, according to IHS, and that number is expected to increase to more than 25 million by 2021.

Here is expected to generate about €600 million in revenue from automotive-mapping services this year, according to IHS estimates, compared with €64 million for TomTom.

TomTom has been gaining ground, but the gap between the two companies remains large. The Dutch map company's biggest market is France, where it supplies both Renault SA and Peugeot SA.

The Volkswagen Golf is the biggest customer for Here. The Golf alone will carry the Here navigation system in more than 173,500 new vehicles this year, according to the IHS.

Juhana Rossi in Helsinki contributed to this article.

Write to William Boston at

Corrections & Amplifications

A previous version of this article was unclear about IHS's estimates for the source of revenue for Here and TomTom.

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