The joint press release of car makers emphasized on what they call “Swarm Intelligence,“ i.e. the crowdsourcing of car data to improve map quality and freshness.
"HERE will be able to offer users a continuously improving product, bringing highly automated driving and location based services a step further. As the volume of anonymized data from the vehicles increases, services will become more convenient, more connected and further tailored to the users' individual requirements," said Ulrich Hackenberg, Member of the Board of Management of AUDI AG for Technical Development, Klaus Froehlich, Member of the Board of Management of BMW AG for Development, and Thomas Weber, Member of the Board of Management of Daimler AG for Group Research.
And the press release to add: “It is the explicit intention that all HERE customers are to benefit from this continuous optimization (through anonymized car data).“
HERE Governance and its impact on Audi, BMW and Daimler competitors
A map company ran by a consortium of three premium car makers is a completely new situation for the mapping and the automotive industry.
Today Audi, BMW and Daimler said they will keep HERE independent. "High-precision digital maps are a crucial component of the mobility of the future. With the joint acquisition of HERE, we want to secure the independence of this central service for all vehicle manufacturers, suppliers and customers in other industries," stated Dieter Zetsche, Chairman of the Board of Management of Daimler AG.
In 2007 Tele Atlas and NAVTEQ were sold to individual companies (TomTom and Nokia) which created weird market situations where companies were forced to either buy maps from their competitor or change provider.
This is good news for licensees, actually the best possible outcome. A wrong scenario would have been an acquisition by a single technology company with completely different goals.
Impact on TomTom
One could think that this deal is bad news for TomTom which could expect to see its business with the three German brands to slowly disappear. But the realities on the automotive market are a bit more subtle than that.
Like in many other industries car makers are relying on several suppliers for the same product and even for the new shareholders the competition between TomTom and HERE will be positive.
Impact on non automotive markets
Even if HERE is doing 60 percent or so revenue on automotive, will this acquisition satisfy the remaining 40 percent of licensees in the business to business or consumer markets?
Even if the focus and investments of HERE are clearly going to be on automotive and high definition maps, that is likely to have a positive effect on a very large spectrum of customers: fresher maps and more precise maps will ultimately benefit everybody.
In addition to that it is important to see that BMW and Daimler (Audi is a bit behind) are increasingly seeing themselves as multimodal transportation companies rather than car makers stricto sensu, as seen from their car-sharing ventures and many other initiatives (Daimler’s Moovel is an example) and investments. Therefore the consumer beyond the driver is going to be more central to them - and their maps - in the mid, long term.
A Good Deal for German Car Makers
Finally, for Audi, Daimler and BMW this acquisition is not only a defensive move but also a sound investment. They are contributing a significant part to the HERE top line; the company is currently increasing its revenue and profit; and, last but not least, the acquisition price is correct. Who could walk away from such a deal?