German car manufacturers to buy Nokia HERE to create superior self-driving vehicles

By MoneyTimes

Jul 24, 2015 09:55 AM EDT

German auto makers consortium composed of Audi, BMW, and Daimler, parent company of Mercedes-Benz, is reportedly in the final stages of discussion to acquire Nokia HERE, the mobile company's map app, for roughly €2.5 billion or $2.7 billion.

While the estimated price is lower than the €8.1 billion Nokia has paid for Navteq, the mapping technology it has used to create HERE, The Wall Street Journal believes that the car makers are the more anxious party.

WSJ assumes that the move is inspired by the fear of getting beaten by continuously growing rivals Google, Apple, and Uber, all from the technology sector and all creating ripples and waves in the car industry.

If Nokia's mapping technology, which is considered as today's most accurate and advanced digital map of the world's major road networks, fall into the hands of their competition, the giant car makers might lose on the race to creating the most efficient self-driving cars as well as future car safety systems.

Exane BNP Paribas analysts shared with Reuters that the self-driving and connected car services could evolve into a $50 billion market.

However, these services are not independent; they are connected to mobile systems, which process data regarding traffic conditions and accident reports to generate the safest and most sensible routes. As such, telecom network infrastructure has become a vital point in major auto-industry deals.

The car makers have shown interest and entered the bidding after Nokia announced a sale following its acquisition of Alcatel-Lucent, allowing it to better focus on its original telecom device business.

Uber was also a participant with Chinese technology company, Baidu, with a reported bid of $3 billion, according to Mashable. When the companies' partnership fell through last month, however, Uber elected to drop out. Thereafter, Uber acquired some of the Bing Maps technology and several Microsoft employees to reduce its dependence on Google and Apple.

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