German automakers acquire HERE

Nokia recently sold its HERE map business to BMW, Daimler and Audi for $3.07 billion. This is not surprising. The outside world has always expected that Nokia will sell HERE and fully integrate the newly acquired Alcatel-Lucent business. In order to develop driverless cars, car manufacturers have been strengthening their map systems.

However, the acquisition of HERE by the German Automobile Consortium is a bad for Google and will have an adverse impact on Google’s ambition for driverless cars.

Many well-known car manufacturers believe that driverless cars will be on the road in 2020. For the past two years, BMW has been experimenting with driverless cars, and last year reached a joint agreement with Baidu on the development of driverless cars in China. Daimler's Mercedes-Benz has demonstrated a variety of driverless concept cars, including 18-wheel trucks. Earlier this year, Audi’s driverless cars completed 3,400 miles of road tests in the United States.

Google started last year to build a pilot fleet of 100 unmanned cars. Google does not intend to manufacture and sell cars by itself, but plans to license its technology to car manufacturers. For technical reasons, Google must provide detailed maps for driverless cars. If Google licenses its technology to automakers, it can link driverless cars with an Android app to track information such as car performance, user driving directions, and the use of targeted ads on multiple platforms.

However, Google’s grand vision of providing maps for driverless cars may not be realized for three reasons:

First, HERE has accounted for more than 80% of the global embedded car map market. Nokia had previously announced that HERE will establish a detailed European and American highway map database in 2018. HERE has a direct competitive relationship with Google’s high-definition maps. As of May, Google only scanned 2000 miles of roads for driverless cars. In California alone, there are 170,000 miles of roads.

Second, German car manufacturers are reluctant to hand over the driver’s data to Google. Audi CEO Rupert Stadler recently claimed that "the only person who needs access to car information is the customer." For Google, this is undoubtedly a blow. Dieter Zetsche, Daimler's chief executive, expressed similar concerns in February. He would not trust Google to have personal information about drivers. In January, Ian Robertson, BMW's head of sales and marketing, told the Financial Times that many technology and advertising companies wanted information from BMW drivers, but the company refused to cooperate with them. Through the acquisition of HERE, the three major German car manufacturers made it clear that they do not want Google to collect data on their cars. If other automakers follow suit, Google will be left out.

Finally, the impact of negligent drivers and unpredictable behavior of pedestrians, completely unmanned cars will still cause traffic accidents. Driverless car technology is costly. For example, the road scan tool for each Google driverless car is worth about $250,000. Therefore, in the foreseeable future, the "anti-collision" system with a price of only about $1,000 is a more viable option.

In the future, HERE may become a non-Google driverless car network, but this does not mean that Google is completely unable to track the driver.

With Android Auto, Google can track users through its maps and other applications. But it can't get information from the car's advanced on-board information system. The on-board information system can find out whether the person sitting in the car is an adult or a child, or how long the engine has been running. The acquisition of HERE by the three major German car makers will certainly not have any financial impact on Google, but it may undermine the hope of creating a smart car for driverless cars in the coming decades.