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Carmakers Raise Stakes in Map Battle vs. Google

MADISON, Wis. — An agreement announced Monday (Aug. 3) by German carmakers — BMW, Audi and Mercedes — to purchase Nokia’s HERE map business has exposed a growing digital rift between Google and traditional car OEMs. Carmakers are showing signs that they’re taking seriously the Google-car threat to their business.

The three premier German car brands have joined forces, shelling out $2.8 billion to hold equal stakes in HERE.

Egil Juliussen, director research & principal analyst at IHS Automotive Technology, told EE Times, “The main reason for the acquisition is to prevent [Nokia’s] HERE from being acquired by a tech company. Maps for self-driving cars will be too important to fall into the hands of potential competitors that may not license the maps to the auto industry or charge high prices for such licenses.”

For carmakers, the move isn’t just about defensive moves.

Asked what the German automakers gain by owning their digital maps, Roger Lanctot, associate director of global automotive practice at Strategy Analytics, explained that they can work toward “better collaboration on vehicle sensor data, traffic probe data and V2V communication.”

IHS analysts agree. In a research note issued Monday, the market research firm wrote: “The acquisition by Audi, BMW, and Daimler poses an interesting opportunity of how an industry collective will share a strategic resource with competitors.”

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By acquiring a global platform in HERE, the automotive consortium “also may establish a de facto standard, giving the industry a unique opportunity to rally around specifications or processes that could in fact hasten the onset of a connected and automated future mobility ecosystem,” IHS said in the research note.

HERE will also has significant impact on the mobile space. HERE is one of two companies supplying navigable maps on a global scale, along with TomTom, as an alternative to Google and Apple.  “Mobile companies—many with consumer-facing mobile clients including Facebook, Amazon, Microsoft, Baidu and Samsung—see an independent mapping solution as critical in order to compete with Google for mobile advertising dollars,” wrote the IHS analysts.

What about other carmakers?
How exactly the three German carmakers plan to share the newly acquired digital map technology with other car OEMs is uncertain.

IHS has posited an industry consortium “supported by an initial fee, as well as an annual fee.” The firm’s assumption is that the membership fee will support ongoing costs in R&D, collection and maintenance of high definition maps in exchange for open access to the maps. IHS explained, “Those not part of the consortium are expected to pay a normal licensing fee as they would today.”

Although one analyst was quoted by Reuters saying that “there is a risk that the other automakers [outside the Audi, BMW and Mercedes-led consortium] will be pushed further into the arms of Google,” most automotive industry analysts we talked to disagreed.

Strategy Analytics’ Lanctot said, “Google maps aren’t suitable to automotive applications. They won’t work where you don’t have a connection, and carmakers don’t trust Google with integration with vehicle data. Even Tesla has an embedded map.”

Juliussen said, “The consortium will want to have as much revenue from HERE as possible to pay for the investment in updating the self-driving car maps. Hence they will behave in a way that allows other auto OEMs to remain as customer.” Further, he added, “If there is a shift to another mapping company, it is more likely to go to TomTom [the Netherland-based digital map company] than Google.”

HERE vs. Google Maps
So, how is HERE actually different from Google Maps?

To read the rest of this article, visit EBN sister site EE Times.

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