Automotive > Infotainment & Telematics Blog

Nokia and the Sentient Network

by Roger Lanctot | 4月 12, 2015

The news broke late this week that Nokia is considering options to sell its HERE map division. Valuations run into the $4B-$5B range, depending on which analyst you cite. It is sad to consider this valuation considering Nokia paid nearly twice as much for Navteq seven years ago.

There’s a lot of interest in mapping data and the companies that gather this data as interest in self-driving cars ramps up. Debates rage across the self-driving car community over the need for maps in self-driving cars, though all car makers agree that map data is useful for guiding autonomous vehicles.  Most observers expect the car company with the most detailed maps to have the most versatile self-driving cars.

Like HERE, TomTom has been the subject of acquisition rumors including such candidates as Apple (perennially), Alibaba and, most recently, Harman International. The acquisition suspect most frequently noted for HERE is Microsoft.

The value of map companies has remained strong.  But valuations have not spiked upward, even though Nokia and TomTom stocks have gotten a lift from the HERE speculation.

Those stock gains come in spite of the emergence of freely available maps from Google and OpenStreetMaps for navigation on mobile devices. Useful and popular though they may be, the free maps are not suited for use in built-in navigation systems in cars, which is where Nokia’s HERE map division stakes its claim to 80% of the dashboard navigation market.

Nokia has begun building on that strong map market share by adding its own navigation software, search and a range of location services – culminating in the deployment of a complete navigation platform in the new Jaguar XF due out later this year. The interest in maps and navigation has fueled speculation around the potential acquisition of Telenav and NNG, both of which are attractive acquisition targets because of their broad, existing and long-term relationships with car makers.

TomTom and HERE need new visions of valuation enhancement and extraction.  TomTom has struggled to stimulate growth in the slow-paced fleet sector, while Nokia has doubled down on map data collection accuracy while broadening its location portfolio.  But Nokia has been rolling the valuation dice recently on what it calls its Digital Transportation Infrastructure gambit.

Away from the dashboard focus, HERE has been quietly touting its concept for embedding location intelligence into wireless network infrastructure such as that offered by Nokia Networks. Nokia’s concept for an intelligent network is to build location awareness into the network to enhance transportation including everything from recognizing accidents to rerouting traffic based on wireless signals from mobile devices and embedded systems.

Ericsson has been promoting a similar concept with its Traffic Cloud. Both concepts are ingenious in the manner in which they seek to leverage LTE and, eventually, 5G connections combined with analytics embedded in the network (in the case of Nokia) or in the cloud (in the case of Ericsson) to deliver value back to consumers and enterprises. Both approaches seek to put intelligence on the edge of the network.

This vision of an intelligent, thinking network is fascinating for the possibilities and implications that it conjures. With appropriate coding and protocols the network itself – with near instantaneous communication to devices and vehicles and, yes, things – can deliver contextual awareness capable of enabling vehicles to avoid crashes with each other or even with pedestrians and bicyclists. The mitigation of traffic congestion, carbon emissions and fuel consumption are also contemplated.

The reports of Nokia’s consideration of a sale of HERE is predicated on Nokia’s inability to find synergies between the HERE map division and Nokia Networks. The challenge for Nokia is to sell its concept of a thinking network to wireless carriers, when the chief beneficiaries will be car companies and local departments of transportation seeking to implement intelligent traffic systems.

The Nokia/HERE concept is ideally suited to the emerging vision of intelligent transportation systems – but too many of these ITS projects are focusing on dedicated short range communications (DSRC 802.11p) technology for vehicle-to-vehicle and vehicle-to-infrastructure communications. DSRC is the technology currently being fast-tracked toward a mandate by the National Highway Traffic Safety Administration in the U.S. and being proffered as a voluntary proposition in Europe.

Unfortunately, even the best case deployment scenarios for DSRC see it arriving in the market years from now and not delivering actual value or realistically useful applications for at least another 10 years. Nokia’s vision is capable of delivering value to drivers as soon as it can be deployed.

The ITS community for the most part, especially in the U.S., continues to shun LTE wireless technology in spite of the fact that LTE Advanced technology already enables device to device communications. But even more importantly, the Nokia/HERE vision is capable of enabling today – without further testing – many of the applications promised but still largely unproven for DSRC.

It’s a sad state of affairs that the ITS crowd and transportation leaders continue to blind themselves to the possibilities, the opportunities presented by Nokia’s concept of a thinking network. The worst aspect of all is that this blindness is nothing more than ignorance – the average ITS executive simply does not understand the current state of wireless technology and the evolutionary path it is on.

The next generation of wireless technology, 5G, promises near instantaneous inter-device communications equivalent to V2X functionality. It is a shame to see Nokia struggle to bring its Digital Transportation Infrastructure concept to life – and even worse to see the company tempted to rend itself, in part, as a result of this delay.

An observer can only hope the Nokia Networks vision of a thinking network will find a path to market in spite of the outcome of a potential sale of HERE. Thinking networks are the future. It is only a matter of time before they become a reality.

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