So it seems Nokia wants to sell off its HERE maps division; or at least seriously considering it. In reports coming out today from Bloomberg and Reuters, the Finnish mobile giant is in talks to sale HERE which is a mapping competitor to Google Maps. No reason is given (that I’ve read yet) for the sale but the articles indicate Nokia is looking to concentrate on its backend businesses Nokia Technologies and Nokia Networks. Nokia made a few waves with sort of backdoor reentry into mobile with the N1 tablet, but that was part of a licensing deal with Foxconn. The HERE sell would further remove Nokia from the consumer mobile market.
Now as of this writing this potential deal is a rumor; it could fall through. But the sale has interesting ramifications for a number of companies.
Here Maps was a division created from Nokia’s mapping service and Navteq which Nokia purchased in 2008 for $8.1 billion. It is one the few mapping companies that can compete against Google in terms of services like street side views and indoor mapping. The division was almost snapped up when Microsoft bought Nokia’s hardware division last year. That deal fell through according to reports due to Nokia wanting more than Microsoft thought it was worth.
Right now potential buyers seem to include a lot of private equity firms who may maintain the business as is but more than likely cut it up and keep the patents. HERE’s business provides backend mapping data to a number of companies including Microsoft, Amazon, and YAHOO any of whom is a potential buyer. HERE also sells services to manufacturing and automotive companies for in car units and amongst those Uber (the ride sharing company) has come up as a potential suitor. Personally I would add Apple as a credible buyer due to its wanting to reduce its reliance on Google for essential services; also it has the most in the bank to close this deal.
Where ever HERE ends up the future of the company will be up for grabs. Companies like Apple or Amazon will most likely purchase them to enhance their own services and end any cross platform play. An equity firm will most likely push HERE to be service company focused on manufacturing and being the map your car uses. YAHOO could sweep in but I don’t think they have the cash but you never know. Then there could be a surprise like Google snapping HERE up but in my opinion they would do it so no one else could. Lastly Microsoft could finish what they started when they bought the Nokia hardware unit. Bing uses HERE’s map data and they wanted the unit before. But Microsoft may be a little gun shy given past history and Nokia wanting to get as close to what they bought it for in 2008. And even with all this speculation Nokia could decide not to sell. They want to recoup some of that original buying price when they bought Navteq (right now HERE is worth $2.1 billion). If they don’t see a number they like they could decide it’s just cheaper to keep her.
All in all it is surprising news from the Espoo tech company which has been quiet until now.