Daimler CEO: Nokia Maps bid all about security
Although exact figures haven't been publicly announced, it's believed that Daimler's Mercedes-Benz brand, along with BMW, Volkswagen, and Audi are willing to pay as much as $3.3 billion for Nokia Here.
Nokia's Here mapping and navigation technology is desirable to German carmakers for one, major reason: security.
In an earnings call with investors on Thursday, Daimler CEO Dieter Zetsche, whose company owns Mercedes-Benz, acknowledged that his company is among other German carmakers interested in acquiring Nokia's mapping business, adding that he's particularly concerned with making the platform more secure to safeguard it from hacking attempts.
"We have the goal of designing security into the software," Zetsche said, according to Reuters, which listened in on the earnings call.
Nokia Here doesn't get the same attention as competing services like Google Maps or Apple Maps, but is one of the most prominent mapping offerings in the industry. Last year, Nokia said that Here powers the navigation systems in four out of five cars on the road, providing up-to-date maps for 196 countries and live traffic information in 41 countries. Nokia also sells or licenses the mapping platform to several other companies, including Garmin, Oracle and Amazon.
On April 30, Nokia touted the success of its Here business during the first quarter of 2015, reporting to investors that its sales were up 25 percent year-over-year to 261 million euros ($287 million). Carmakers licensed Nokia's Here technology for 3.6 million new vehicles during the quarter ending March 31, a jump of 29 percent compared to the same period last year. The Here division's gross profit hit 194 million euros, rising 21 percent compared to the prior year.
Despite its success, Here is currently under review at Nokia. The company, which is currently focusing its efforts on patent licensing and networks technology, is unsure whether Here should fit into its plans. In May, Nokia CEO Rajeev Suri wouldn't go so far as to say that he'd sell Here, but did say that he would like to " get the right value" for the mapping arm, indicating a sale is likely, at the right price.
According to Reuters, the consortium of carmakers interested in acquiring Here, which also includes Audi, BMW, and Volkswagen, may be willing to pay as much as $3.3 billion. Earlier reports have suggested that China-based Tencent is interested in acquiring Here. Meanwhile, car-hailing service Uber, which was also considering a buy, has reportedly been kicked out of the running, despite reportedly bidding up to $3 billion for the service.
The issue of building security into Here would be a critical one for any company considering acquiring Here. As cars increasingly become smarter and capable of connecting to the Web, they're at risk of being hacked, regardless of the software running inside them. At the hacking conference Defcon last August, security researchers pitched the idea of an automobile cyber safety rating system after sharing details on how easy it is to hack a car, turn it off, and leave it unusable. Chrysler and Nissan were among the brands the researchers called the "most hackable" cars on the market. Those findings were followed in February by an investigation released by Sen. Edward Markey (D-Mass.), that found that nearly 100 percent of new cars are vulnerable to hacking.
According to Reuters, the Daimler security concerns go beyond just today's technology. Zetsche said that as his company looks to the future of driverless cars powered by internal software, including technology like Here, having security built in to ensure driver safety is crucial. He argued that securing cars now will help address possible issues in the future.
But before Daimler and partners can do any of that, they need to actually acquire Here. So far, no deal has been announced and Nokia declined comment on any plans for the future of its Here operation.