September 4, 2013 19:01 rlanctot
The acquisition of Nokia’s devices business by Microsoft highlighted the key role played by operating system software and maps. The Microsoft acquisition demonstrated the importance of vertically integrating hardware and OS in a post-iPhone era. But Microsoft’s ambivalence toward including HERE in its acquisition raised questions over the role and value of map data.
Microsoft will be an important licensee of HERE, most notably its navigation assets. But Microsoft clearly chose not to acquire those assets, including HERE’s automotive grade map.
Microsoft’s lack of interest in HERE highlights the growing interest in OpenStreetMaps. OpenStreetMaps is the crowd-sourced alternative to HERE, TomTom and Google maps. Founded by Steven Coast, OSM has devotees around the world who continue to contribute, raising the quality of OSM’s offering along with the interest level of navigation companies.
Most recently Coast left Microsoft to join TeleNav. TeleNav has been working hard to take advantage of OSM as a potential alternative or enhancement to the company’s existing map partners TomTom and HERE. Navmii is another OSM partner, with its own OSM-based navigation app and automotive ambitions.
HERE has near monopoly status as the sole provider of what it defines as an automotive grade map. TomTom, AND and a handful of local map providers around the world also offer navigable, automotive grade maps. But no other organization in the world gathers as much road attribute information as HERE or has a data gathering fleet the size of HERE’s.
In fact, while competitors, such as TomTom, have pared back their data gathering resources, HERE has stepped up its efforts – expanding the quantity of information gathered, the miles of roads driven (by the company’s True II survey vehicles) and the frequency and flexibility of map updates. HERE’s data gathering was enhanced by the acquisition of Earthmine and its camera-based road surveying technology now widely deployed.
While respecting and using HERE’s map data (HERE claims upwards of 80% share of in-dash navigation systems), car makers and their suppliers have been increasingly tempted to tap OSM’s map resources as a base level of data upon which to build their own crowd-sourced maps. More than one OEM is exploring the build-your-own map proposition by combining OSM data with connected car probe data a la Waze.
Waze famously built its own map and traffic data from user probe inputs leading up to its near-billion-dollar acquisition by Google. Car makers are eager to leverage their own probes, vehicle connections and sensor and camera inputs to create an in-house alternative to HERE’s map.
Between Google and OSM, the pressure on map pricing is intense. And Apple is also thought to be considering tapping into OSM which, again, will pressure both TomTom and HERE.
HERE has chosen to buck the trend by enhancing its data gathering and linking map data to advanced safety systems and powertrains. TomTom has taken a page from OSM’s playbook by leveraging its probe network to enhance its map data.
The challenge for OSM is to overcome existing limitations in its map offering including the lack of TMC location information for linking to traffic incident reports and the lack of road attribute information, such as turn restrictions. These are not insurmountable obstacles (ie. OSM is thought to be working on using lat./long. data in place of TMC location referencing) but car makers must be honest with themselves regarding the scope of the effort.
The issue of map quality was highlighted recently by a class action lawsuit filed against BMW in the U.S. over its navigation systems, which are based on TomTom maps. According to a report on the Topclassactions.com Website:
“The BMW class action lawsuit claims that the optional navigation feature, which costs $1,800, is faulty and cannot be fixed. Plaintiff Karen Morris says that the feature gives wrong directions, resets without warning and misidentifies locations. She accuses BMW of knowing that the technology was defective based on its own testing, industry testing and complaints from consumers and dealers.
BMW declined to comment on the lawsuit. This analyst has had his own unsatisfactory experiences with BMW navigation maps in a 2013 3 Series.
Car makers seeking to take advantage of what OSM has to offer will be watching advances in OSM closely along with the progress of the BMW class action. For now it looks as if Microsoft has chosen a wait-and-see approach to its long-term map strategy. HERE, meanwhile, continues to gather data, expand its database and speed its map updating. Only time will prove whether HERE is able to upgrade or preserve the value of its maps or simply slow the erosion in their value.