Market Insight

Nokia Launches New Cloud Location Service Strategy With HERE Brand

November 14, 2012


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- Nokia re-brands its mapping and location efforts as 'HERE'. The existing Nokia maps website now re-directs to www.here.com

- Mozilla enters into a strategic partnership with Nokia. An HTML5 mobile web version of HERE maps will launch on Firefox OS in 2013.

- HERE apps and services will be available for multiple mobile devices and also via PC web browsers. HERE supports smartphones running Apple's iOS, Android, and Firefox OS.

- For developers, Nokia will offer an SDK for Android to enable HERE to be built into other company's apps.

- Nokia acquires earthmine, a 3D capture company. Its technology is integrated into the new HERE service.

With HERE, Nokia recognises that maps and location are a business that benefits from vast economies of scale. Maps are both difficult and expensive to build, maintain and test. This is a major reason that Nokia's location and navigation division has struggled for profitability.

By supporting other mobile devices Nokia maximises its ability to crowd source updates to location data. Additionally, new value added features such as traffic monitoring become more reliable and better products the more people that use them. Other companies that seek to develop maps and location for a single range of devices -- such as Apple  --  will struggle to create as complete a location product as Nokia will be able to deliver with this multi device and multi OS strategic approach. These announcements highlight the long term location problem for Apple: One of iOS maps few differentiators is 3D support, and now it ceases to be distinctive because of Nokia's incorporation of earthimine's 3D capabilities into HERE.

Like software, maps and navigation licensing is also a business that benefits from economies of scale: Build the maps and location services once for a broadly fixed cost, then license the result as many times as possible to generate strong marginal returns. By supporting so many mobile devices, Nokia demonstrates how powerful its location system would be for potential licensees and this will help to support its location and maps licensing business. So, HERE's multi platform acts as a full-on proof of concept for Nokia's location expertise and capability, building on earlier releases of Nokia Maps based on HTML5 accessible on iOS and Android.

The new HERE brand will also help Nokia extend its product line-up inside and outside the mobile industry. The brand separation from "Nokia" will make the licensing business easier than if a potential licensee had to accomodate Nokia's own brand in competition with its own. In essence, Nokia is attempting to regain some of the perception of independence that NAVTEQ lost following its acquisition by Nokia and inclusion into the Location & Commerce business unit.

Nokia CEO Stephen Elop barely mentioned Nokia's preferred smartphone OS, Windows Phone, in the launch for HERE. Nokia may be preparing the ground for yet another change of mobile strategy. Nokia's new partnership with Mozilla over Firefox OS highlights  a potential successor for Nokia's Asha range of smart featurephones, and this would be a replacement OS that is not built by Microsoft . Nokia currently uses the Asha range to compete with entry level Android smartphones in emerging markets. Mozilla and key Firefox OS operator supporter Telefonica have been keen to aim Firefox OS at an under-served part of the mobile market. This is classic disruptive strategy. Firefox OS could fit into the third plank of Nokia's stated mobile strategy of "future disruptions."

Most striking about the HERE announcement is that Nokia's location-based strategy is not being constrained by Nokia's position in the mobile handset market. Particularly, by Nokia's choice of Windows Phone as a smartphone platform. This is the right approach for Nokia as it will maximise the chance for its location business to be successful. And, the new brand and wide reach of HERE will also make both HERE and Nokia itself more attractive to potential corporate buyers. 

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