Nokia’s HERE Maps Now In Samsung’s Galaxy Smartphones And Gear
Nokia (NYSE:NOK) recently announced that it has entered into a licensing agreement with Samsung, which will bring Nokia’s HERE maps to Samsung’s Galaxy line of smartphones, which run on the Android operating system (OS). Similar to their functionality on the Windows OS, the free-of-cost HERE maps application will be available offline on Android as well. This will allow users to search for places on the map or use voice navigation without connecting to the Internet. HERE maps will also be available on Samsung’s Tizen-powered devices such as its new Gear S smartwatch. The licensing agreement is in line with Nokia’s strategy of focusing on autos and smartphones to expand its HERE business and we expect this to help Nokia expand its share rapidly in the global smartphone maps market, currently dominated by Google (NASDAQ:GOOG) Maps. [1] [2]
Our $8.20 price estimate for Nokia is roughly in line with the current market price.
See our complete analysis for Nokia stock here
The HERE Business
HERE is Nokia’s mapping and location intelligence business, which currently contributes less than 3% of the company’s valuation, according to our estimates. The division’s sales grew by 2% year-over-year to EUR 232 million ($305 million) in the second quarter this year, on account of rising automotive sales as well as embedded navigation system sales. Nokia has built the business primarily through acquisitions, starting with its buyout of Berlin-based gate5 in 2006, followed by the acquisition of Chicago-based Navteq for $8.1 billion in 2008 and 3-D map technology expert Earthmine in 2012. [3] [4] The company also made a few interesting acquisitions in the last quarter, including Desti and Medio Systems, to make its HERE unit more personalized and intuitive and boost the long term potential of its mapping business. ((Press Release- Desti Acquisition, Nokia, May 30 2014)) ((Press Release- Medio Acquisition, Nokia, June 12 2014))
Nokia provides its map data to 80% of all car-navigation systems in the world and several major enterprises including Amazon (NASDAQ:AMZN), Yahoo (NASDAQ:YHOO) and Microsoft (NASDAQ:MSFT). [5] Microsoft is one of Nokia’s biggest customers with its four-year licensing deal to use HERE on its mobile devices. We expect the recent agreement with Samsung as well as recent acquisitions and investments to help the company lay a solid foundation for its long-term growth and attract customers going forward.
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Notes:- Press Release, Here.com, Aug 29 2014 [↩]
- Press Release, Here.com, Aug 29 2014 [↩]
- Nokia to buy Navteq for $8.1 billion, CNET.com, October 1 2007 [↩]
- Earthmine Acquisition, Here.com, Nov 13 2012 [↩]
- Nokia to Buy Medio for Analytics Data in Map Push Against Google, Bloomberg, June 12 2014 [↩]