German automakers complete HERE acquisition

December 30, 2015  - By
Kevin Dennehy

Kevin Dennehy

In what was 2015’s largest location-industry deal, three German luxury auto manufacturers completed the purchase of HERE. But that wasn’t the only recent acquisition as location-based services provider TeleCommunication Systems, or TCS, was bought by Comtech Telecommunication Corp. Both deals indicate the growing, and continued growth, of location services going forward into 2016.

Three German automakers are now in the location business following the finalization of a $2.8 billion deal to buy Nokia’s HERE digital mapping company last week. Audi, BMW and Daimler are now equal owners of HERE following quick regulatory approval.

While some say there was much Nokia-driven hype about who was bidding on HERE, including Uber and Baidu, ultimately others breathed a sigh of relief that automotive companies, not Google, bought the digital mapping pioneer.

The deal, which was originally announced in early August, shows the continued value of accurate maps to the automotive industry as it transitions for connected to autonomous vehicles. In addition, the number of big suitors interested in HERE shows the rise in the potential and real market for location-based services in both smartphones and connected vehicles.

Many of the early suitors balked at HERE’s early price tag, estimated to be more than $4 billion. Uber, which some felt would be a good match for HERE because of their autonomous vehicle intentions, decided to go in another direction, buying mapping company deCarta.

While it’s too early to analyze the consequences of the deal, some analysts say it will be interesting to see if the new owners keep the mapping giant neutral to not alienate future clients.

It remains to be seen whether its competitor, TomTom, which also has been talked about as an acquisition target, should stay as an independent company or form its own consortium.

Nokia purchased HERE, the former Navteq, for $8 billion in 2007. The sale of HERE is part of Nokia’s transformation as it completes its $16.6 billion acquisition of Alcatel-Lucent, which is expected to close early next year.

In another big deal since our last column, Annapolis, Md.-based TeleCommunication Systems was acquired by Comtech Telecommunication Corp. for $430.8 million deal. The deal is expected to close in March 2016.

TCS was one of the first companies to do it all in the consumer location space, buying entities in automotive navigation and also making inroads in the fleet management and indoor positioning/9-1-1 space. The company most recently was developing location technology for mobile, or m-health markets.

Cyber Security Big Connected Vehicle Concern in 2015

As we review the past year, one of the biggest connected vehicle trends in 2015 was when cyber security became real for the automakers, said Jon Allen, Booz Allen Commercial Solutions principal.

“Just as automakers are increasingly demonstrating the power of automation, their momentum is challenged by researchers showing they really can hack into vehicles. While there are engineering challenges ahead to realize the full potential of autonomy, the priority in automotive is to protect the trust of customers and regulators as autonomous capabilities are further developed,” he said. “That puts cyber at the top of the agenda.”

2016, OEMs will need to further embrace a security mindset, Allen said. “These [cyber risk] issues are solved by designing, engineering and testing your vehicle to meet defined standards. But cyber risk has an outside variable you can’t control: cyber threat actors. This means you’re not just engineering a solution — you’re fighting an adversary,” he said.

Allen said that automakers need to identify a single leader to champion vehicle cyber security, supporting them up with an integrated, cross-functional team. “That includes experts from safety, privacy, IT, legal, engineering, manufacturing, customer service and supply chain,” he said.

Autonomous vehicles tout a safety record that far surpasses today’s cars, but a cyber incident has potential to reverse that claim, Allen said. The “doomsday” scenario is attacking multiple vehicles over the air to “brick” multiple platforms, but this may be an unlikely near-term scenario, he said.

“The near-term attacks will be motivated by money. That’s why many of the largest hacks were designed to exploit personal and financial information,” Allen said.

At a Colorado Space Roundup meeting in Denver last week, Thad Allen, former Coast Guard commandant and now executive vice president at Booz Allen Hamilton, said that there won’t be a “cyber Pearl Harbor” as the government and civilian entities should have had plenty of warning it was coming. Allen, who was in Denver working on the GPS Operational Control System, or OCX, also said that it would be catastrophic if the GPS infrastructure was compromised.

“If someone does something to disrupt GPS, it will affect everyone,” said Allen, who oversaw the Hurricane Katrina and Deepwater Horizon oil spill operations.

Indoor Positioning’s Big Story in 2015: Consumer Appliances?

While there were several significant tests and infrastructure rollouts, at least one analyst says the rise of indoor positioning in consumer appliances was huge. Bruce Krulwich, Grizzly Analytics founder, said that such companies as Move ‘n See are putting location chips into electronic devices.

Move ‘n See also has a camera robot, called Pixio, which follows a person moving around a sports field or other indoor site. “What’s huge about this is not the product itself — it’s hard to tell whether it will appeal to the masses or only a niche market–but I believe that it’s the first in a new trend of electronic products that enhance their capabilities by incorporating indoor location technology,” he said.

In other location news:

  • CalAmp Corp. said it made a $113 million offer for LoJack Corp., which is a pioneer in car theft-recovery using location technology. According to published reports, CalAmp has made three cash offers for Lojack in the past 14 months. LoJack’s car recovery systems use location technology, which seems to be a great fit for CalAmp, which offers fleet tracking software.

It’s been a good run. After eight-and-a-half years, this is my last Wireless LBS Insider column. Many thanks to Alan Cameron and Tracy Cozzens, both seasoned journalists, who steered me on the right course over the years. I will be at CES in a freelance role next month and will continue to operate my autonomous vehicle conference, Driverless.

Kevin Dennehy

About the Author:

Kevin Dennehy is GPS World’s editor for location-based services, writing a monthly column for the LBS Insider newsletter. Dennehy has been writing about the location industry for more than 20 years. He covered GPS and location technology for Global Positioning & Navigation News for seven years. His articles on the wireless industry have been published in both consumer and trade magazines and newspapers.

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