Nokia Oyj (NOK1V), the struggling Finnish smartphone maker, is acquiring 3-D map-technology maker Earthmine Inc. and revamping its mapping tools under a new brand name to win back customers from rivals such as Apple Inc. (AAPL:US)
The Earthmine purchase will help Nokia expand in mapping, a growing business it considers key to driving smartphone sales and becoming profitable again. The company unveiled Here, the brand for its location services and website, at an event in San Francisco yesterday, and said it has created a mapping app for Apple’s mobile devices. It will also make its map technology open to developers using Google Inc. (GOOG:US)’s Android operating system.
Nokia, which started selling its flagship Lumia 920 smartphone this month, is promoting location features to differentiate itself from Apple and Android devices. Nokia, which bought Chicago-based map provider Navteq for $8.1 billion in 2008, also competes against Google in providing maps to other companies, and has customers including Amazon.com Inc., Yahoo! Inc. (YHOO:US), Daimler AG (DAI)’s Mercedes-Benz and Nikon Corp. (7731)
“There are two big assets, really good assets, when it relates to location-based services in the world and we have one of them,” Nokia Chief Executive Officer Stephen Elop said today in Barcelona at a conference organized by Morgan Stanley. “We’re going to be far more aggressive in making that available and visible to consumers.”
Nokia shares rose 2.5 percent to 2.18 euros at 4:31 p.m. in Helsinki. The stock has fallen 42 percent this year, giving the company a market value of 8 billion euros ($10.2 billion). The company, once the smartphone market leader, has lost about 90 percent of its value since Apple introduced the iPhone in 2007.
The purchase of Berkeley, California-based Earthmine will give Nokia a new way to collect three-dimensional data to improve its location offering. The deal is expected to close by the end of this year. Nokia, based in Espoo, Finland, didn’t disclose financial details of the acquisition.
While Nokia has been playing catch-up with its smartphones after the success of Apple’s iPhone, it continued to pump money into its location and services business and now has navigable data for at least 100 countries, up from 27 at the time of the Navteq purchase. Its new cloud-based location service will soon be available for operating systems beyond Microsoft Corp. (MSFT:US)’s Windows Phone software that powers Lumia smartphones.
“This is Nokia finally realizing a vision they’ve been working on for a long time,” said Van Baker, an analyst at Gartner Inc. “They’ve probably got the best maps on the market, and they’re a lot further down the road” in presenting information specific to each user’s life, Baker said.
Nokia posted its sixth straight quarterly loss last month as its third-quarter net loss widened to 969 million euros ($1.23 billion) from 68 million euros a year earlier. The adjusted operating margin at Nokia’s location and commerce unit was 14 percent on sales of 265 million euros. At the time, Elop said this quarter will “continue the transition” as Nokia brings out new Lumia models and will be “challenging.”
A mobile version of Nokia’s Here location-services application, which will include offline use, voice guidance and public transport information, will be available from Apple’s App Store in about two weeks, pending Apple’s approval.
“On the chance that there might be a few iPhone users that want a different map,” Peter Skillman, Nokia’s head of user experience design, said at yesterday’s event.
Apple’s own mapping app, which replaced Google’s maps in the latest iteration of Apple’s iOS mobile software, has been criticized as being unreliable and lacking features.
“A lot of people don’t trust Apple’s maps right now,” Gartner’s Baker said. He said Nokia has six to 12 months to attract Apple customers to Here before Apple improves its own mapping service.
Nokia’s application programming interface for Here will be available to Android developers early next year, the company said.
Lumia smartphones include City Lens, which uses so-called augmented-reality technology, allowing users to hold up their phone to see tips on stores and restaurants. City Lens will now offer LiveSight for 3-D mapping images. The phones also include driving and public transport instructions with turn-by-turn guidance and offline maps.
“The location services -- the mapping, the navigation, the augmented reality -- are primary differentiators for our devices,” Elop said in an interview yesterday. “The best and first experiences will show up on Nokia’s devices.”
Michael Halbherr, head of Nokia’s location and commerce unit, said last month the market is focusing more on precision in maps after Apple was criticized over initial errors in its iPhone navigation software.
To contact the reporters on this story: Adam Ewing in Stockholm at email@example.com; Peter Burrows in San Francisco at firstname.lastname@example.org
To contact the editor responsible for this story: Kenneth Wong at email@example.com