Amid rumors of an Apple buyout, Nokia's maps business shines in otherwise disappointing quarter

Posted:
in General Discussion edited May 2015
Shares of Nokia fell more than 12 percent on Thursday after the company's networking division reported disappointing results. But a bright spot was its "Here" mapping division, which is rumored to be a potential acquisition target for Apple.




Revenue at Nokia was up 20 percent year over year to 3.2 billion euros, but operating profits fell to just 265 million euros. The brunt of that was felt by the Nokia Networks division, which saw its profitability take a significant hit --?falling more than 60 percent to just 85 million euros, despite seeing an increase in total revenue.

Investors were discouraged by what they saw out of Nokia's earnings and the stock tumbled on Thursday. Still, there were bright spots for the company, which got out of the smartphone business by selling its Lumia handset division in 2013 for $7.2 billion.

Among the positives for Nokia was its mapping division, dubbed "Here," which boosted profit by 20 percent to 162 million euros.

Nokia is looking to refocus as a networking company, and is said to be shopping around its Here division for a reported $3.2 billion price tag. Among the companies rumored to be interested: Apple.

If Apple were to buy Nokia's Here for its asking price, it would be the largest acquisition in the company's history, eclipsing the $3 billion it spent on Beats last year.

For Apple, the addition of HERE could play an important role in the buildout of Apple Maps, which drew criticism when it launched in iOS 6. Two and a half years later, Maps still lacks basic features like mass transit data, though Apple is working on enhancing backend support.
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Comments

  • Reply 1 of 28
    radarthekatradarthekat Posts: 2,529moderator
    Generally, I'm in favor of any acquisition by Apple that meets one of the following two criteria:

    - A successful and profitable product or service that can be quickly scaled into Apple's distribution. (That's all the reason needed behind last year's Beat acquisition, and the point seemingly missed by EVERY analyst.)

    - A product or technology that can significantly improve an existing Apple product or service. (This is where an acquisition of Nokia's Here mapping might be justified.)

    Of course, the price must be right in any potential acquisition.
  • Reply 2 of 28
    Quote:
    Originally Posted by RadarTheKat View Post



    Of course, the price must be right in any potential acquisition.

    And three point two billion dollars is not the right price. Beats may have been three billion, but they also have hardware revenues which will recoup that quickly. HERE is not a product that brings in direct profit, and Apple isn't going to sell more iPhones just because the built in Maps application improves.

     

    This is something you spend a few hundred million on at most, and even then, it might be cheaper to do it in house.

  • Reply 3 of 28
    dugbugdugbug Posts: 283member
    Maybe they throw in some patents
  • Reply 4 of 28
    carthusiacarthusia Posts: 561member
    Tim mentioned, I think on Charlie Rose, that based on hardware sales alone, Beats as a business is $1bn per annum accretive. Great buy. When you look at the Apple store you see the prominent positioning of Beats audio hardware.

    Apple, IMHO, is 70% there with Maps. They don't need to spend $3.2bn on Here. iPhone and Maps sales are not suffering because of Maps and I think they'll be big announcements on transit and POI improvements to Maps at dub dub.

    Watch OS has been a strategic software priority for the past few years.
  • Reply 5 of 28
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     

    And three point two billion dollars is not the right price. Beats may have been three billion, but they also have hardware revenues which will recoup that quickly. HERE is not a product that brings in direct profit, and Apple isn't going to sell more iPhones just because the built in Maps application improves.

     

    This is something you spend a few hundred million on at most, and even then, it might be cheaper to do it in house.




    The article states that HERE made a profit of 162 million euros.

     

    Others do not agree with your valuation:

     

    Quote:


     HERE, which analysts value at 5 to 7 billion euros, has attracted interest from several bidders including tech companies Facebook and Uber, as well as private equity firms.


    http://finance.yahoo.com/news/nokias-network-profits-drop-raise-111114226.html

  • Reply 6 of 28
    cnocbui wrote: »

    The article states that HERE made a profit of 162 million euros.

    Others do not agree with your valuation:

    http://finance.yahoo.com/news/nokias-network-profits-drop-raise-111114226.html

    In smart person world, Youd realize Apple doesn't sell their mapping app. So where is the profit going to come from? :no:

    And not ONE analyst is worth listening to.
  • Reply 7 of 28
    Quote:

    Originally Posted by TheWhiteFalcon View Post





    In smart person world, Youd realize Apple doesn't sell their mapping app. So where is the profit going to come from? image



    And not ONE analyst is worth listening to.



    I think the technology behind HERE is what Apple would be interested in acquiring and then folding it into Apple Maps. Remember as a general rule of thumb Apple doesn't say why or what the acquisitions they acquire are going to be used for so only they would know why they would want to purchase a company/technology.

     

    I would also agree with your assessment of analysts.

  • Reply 8 of 28
    I wonder what specifically Apple is interested in, my car's sat nav is from Nokia and it's pretty awful and I think VW just dropped them in favor of TomTom
  • Reply 9 of 28
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by TheWhiteFalcon View Post





    In smart person world, Youd realize Apple doesn't sell their mapping app. So where is the profit going to come from? image



    And not ONE analyst is worth listening to.

     

    "HERE is not a product that brings in direct profit"

     

    In smart person world your statement is present tense, not future tense.

     

    HERE is generating $288 Million in revenue.  Your valuation of "a few hundred million at most" is risible.  As someone who uses and really likes HERE I sincerely hope Apple doesn't purchase it and that Microsoft does.

  • Reply 10 of 28

    I can't believe Apple would buy "Here" at this point.  As an organization, "Here" is a bit dysfunctional. There is certainly a potential there but this part of Nokia has really struggled with who it is and where they are going.  The Earthmine acquisition was a costly stab in the dark to reorient the compass but in the end, it may prove to be the best move that was made over the last 5 years for the company.  A considerable amount of the effort was put into the "True" product (2008 to 2012) and it would be difficult to define how that effort moved the company towards a sustainable future.  Google came along and pulled the technology rug right out from under Nokia.

     

    Apples own mapping vehicles have been on the road for a while now and from what I can see from the configuration they are running, they are creating a result that may be superior to the current Here system.  Apple doesn't need Here unless they are rushed to get a new Maps out by fall.  

  • Reply 11 of 28
    agramonteagramonte Posts: 345member

    More money to fix a stupid move. Just scrap all this nonsense and just bake Google Maps back in.

  • Reply 12 of 28
    sevenfeetsevenfeet Posts: 380member
    Quote:

    Originally Posted by Geospatial View Post

     

    I can't believe Apple would buy "Here" at this point.  As an organization, "Here" is a bit dysfunctional. There is certainly a potential there but this part of Nokia has really struggled with who it is and where they are going.  The Earthmine acquisition was a costly stab in the dark to reorient the compass but in the end, it may prove to be the best move that was made over the last 5 years for the company.  A considerable amount of the effort was put into the "True" product (2008 to 2012) and it would be difficult to define how that effort moved the company towards a sustainable future.  Google came along and pulled the technology rug right out from under Nokia.

     

    Apples own mapping vehicles have been on the road for a while now and from what I can see from the configuration they are running, they are creating a result that may be superior to the current Here system.  Apple doesn't need Here unless they are rushed to get a new Maps out by fall.  




    Certainly Nokia has not had a good experience with Here.  NAVTEQ was purchased by Nokia to form HERE in 2007 for $8.1 billion.  If the asking price is now $3+ billion for the entire operation, then that's not a good investment by Nokia.  On the other hand, Apple is looking to bolster it's mapping effort...that much is certain and they have not been shy on making strategic purchases.  And since Nokia is not a US based company, Apple can pay for it with off-shore money they are currently flush with...honestly they wouldn't miss the money much.

     

    HERE also has a fleet of mapping cars much like Google which would be useful for Apple to fill in data mapping holes in competition with Google.  The big problem is going to be if Apple wants to continue HERE's businesses, which is mainly licensing said mapping data to the automotive industry.  Some of the biggest names in the business (Volkswagen, Toyota, BMW Group, Mercedes) are customers.  And then there's the licensing program for cloud application vendors and analytics companies (Amazon, Oracle, etc).  Apple has shown a previous desire of shutting down sales lines of business in acquisitions they consider non-core businesses.  But with the automotive customers, it may help Apple leverage CarPlay more.

  • Reply 13 of 28
    cnocbuicnocbui Posts: 3,613member
    Quote:
    Originally Posted by Geospatial View Post

     

    I can't believe Apple would buy "Here" at this point.  As an organization, "Here" is a bit dysfunctional. There is certainly a potential there but this part of Nokia has really struggled with who it is and where they are going.  The Earthmine acquisition was a costly stab in the dark to reorient the compass but in the end, it may prove to be the best move that was made over the last 5 years for the company.  A considerable amount of the effort was put into the "True" product (2008 to 2012) and it would be difficult to define how that effort moved the company towards a sustainable future.  Google came along and pulled the technology rug right out from under Nokia.

     

    Apples own mapping vehicles have been on the road for a while now and from what I can see from the configuration they are running, they are creating a result that may be superior to the current Here system.  Apple doesn't need Here unless they are rushed to get a new Maps out by fall.  




    Apple mapping vehicles are US only, I believe.  Apple Maps has a poor reputation outside the US which is where their data set most needs improving.  It would take Apple years of effort to get close to the HERE data set outside the US, which is where Apple generates most of their revenue from.

  • Reply 14 of 28

    Map Data is just as important as the data that is collected from how we use it.  It seems that Apple no longer wants to pay the price that Google exacts for the use of the Map Data and feels that it can make the user experience better if it controls the resource that drives that opportunity.

     

    Google slapped Nokia hard when they took away the data collection technology that was used for the "True Project" by acquiring "510" who built the collection systems for them.  That is why Nokia purchased Earthmine which is the underlining technology in the Here vehicles.  I believe that all of the major players in this realm know what the other guys are doing.  Between Google, Microsoft, Nokia, and Apple, there are hundreds of these mapping systems driving around the globe.  The answer to their effort has many outcomes that all of them feel has value to their platforms.  Certainly the personal mobile device experience is key result but they are also creating data, if processed correctly, that can be used as an autonomous vehicle base map.  Several of these organizations are counting on this data to give them a foot in the door to the autonomous vehicle market.

  • Reply 15 of 28
    slurpyslurpy Posts: 5,030member
    Quote:

    Originally Posted by cnocbui View Post

     

     

    "HERE is not a product that brings in direct profit"

     

    In smart person world your statement is present tense, not future tense.

     

    HERE is generating $288 Million in revenue.  Your valuation of "a few hundred million at most" is risible.  As someone who uses and really likes HERE I sincerely hope Apple doesn't purchase it and that Microsoft does.


     

    No, your posts are all risible. You're one of the nastiest trolls on this forum. Usually you shill for Samsung, but I guess in this case you decided to change things up and state that you hope Apple does not purchase something you like, and that Microsoft does instead. Par the course for a frothing at the mouth Apple hater, who backs the competition each and every time, and who decides to spend his time posting on an Apple-centric site spewing nothing but bile and mindless troll posts.  

  • Reply 16 of 28

    Apple is very clever in what they let the public have a knowledge of.  Based on the sketchy information I have been able to put together, they are working outside the North American continent and may have been doing so for quite some time.  We have only been aware of it because somebody a few months ago looked up the owner of a collection van through the license plate and discovered the Apple connection.  My bet is that we didn't notice them until that time.  I would speculate from Apple's hardware configuration, that they are doing something really special for the Maps experience.  I can't wait to see how they apply this new source of data. 

  • Reply 17 of 28
     
    Apple Maps still needs work:

    [IMG ALT=""]http://forums.appleinsider.com/content/type/61/id/58651/width/500/height/1000[/IMG]


    This is Ronda, Spain ... It is buitl on a plateau 400 feet above the surrounding area ...

    Apple Maps shows bridges, buildings, roads and swimming pools sliding, Daliesque, off the edges.



    Apple really should fix this and do a 3D Flyover -- a most impressive sight!
  • Reply 18 of 28
    geospatial wrote: »
    I can't believe Apple would buy "Here" at this point.  As an organization, "Here" is a bit dysfunctional. There is certainly a potential there but this part of Nokia has really struggled with who it is and where they are going.  The Earthmine acquisition was a costly stab in the dark to reorient the compass but in the end, it may prove to be the best move that was made over the last 5 years for the company.  A considerable amount of the effort was put into the "True" product (2008 to 2012) and it would be difficult to define how that effort moved the company towards a sustainable future.  Google came along and pulled the technology rug right out from under Nokia.

    Apples own mapping vehicles have been on the road for a while now and from what I can see from the configuration they are running, they are creating a result that may be superior to the current Here system.  Apple doesn't need Here unless they are rushed to get a new Maps out by fall.  

    Yes ... The attitude of some of the rotating scanners/cameras appears to be at 45 degrees instead of 90 degrees like Hoogle and Navteq,


    1000
     
  • Reply 19 of 28
    geospatial wrote: »
    I can't believe Apple would buy "Here" at this point.  As an organization, "Here" is a bit dysfunctional. There is certainly a potential there but this part of Nokia has really struggled with who it is and where they are going.  The Earthmine acquisition was a costly stab in the dark to reorient the compass but in the end, it may prove to be the best move that was made over the last 5 years for the company.  A considerable amount of the effort was put into the "True" product (2008 to 2012) and it would be difficult to define how that effort moved the company towards a sustainable future.  Google came along and pulled the technology rug right out from under Nokia.

    Apples own mapping vehicles have been on the road for a while now and from what I can see from the configuration they are running, they are creating a result that may be superior to the current Here system.  Apple doesn't need Here unless they are rushed to get a new Maps out by fall.  

    Just my thinking, but if I were in Europe, HERE is far more accurate and could lure more iPhone buyers into the Apple camp quicker then building out Apple Maps. Also, while Apple does have mapping cars on the roads, I haven't heard of one being spotted in Europe... On the other hand, MS bought access to Nokia's maps when they bought the handset business, I'm not too sure how much similar luggage may have been tacked on HERE since then.
  • Reply 20 of 28
    Quote:

    Originally Posted by Macky the Macky View Post





    Just my thinking, but if I were in Europe, HERE is far more accurate and could lure more iPhone buyers into the Apple camp quicker then building out Apple Maps. Also, while Apple does have mapping cars on the roads, I haven't heard of one being spotted in Europe... On the other hand, MS bought access to Nokia's maps when they bought the handset business, I'm not too sure how much similar luggage may have been tacked on HERE since then.



    The thing is...iOS owners can download other map apps. That's why I don't see this as a huge issue. There are other solutions, and Apple can take their time getting AppleMaps right.

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