Nokia 'on a roll' with maps after Apple woes

Last updated 14:31 11/10/2012
Nokia

FIND HELP: Nokia is making hay while Apple rushes to fix maps issues.

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As Apple faces consumer scorn over errors by the iPhone's navigation software, Finnish rival Nokia is seeking to seize the opportunity by touting the reliability of the digital maps it has spent billions crafting.

The company, struggling to win back smartphone customers lost to the iPhone, is poking at Apple in social media and blog postings claiming map superiority, while promoting location features in ads for its latest devices.

Nokia is betting that the critique Apple has received will highlight the advantage it has gained through years of investing in its maps, said Michael Halbherr, head of Nokia's location and commerce unit.

"What I love and what I think has happened is that the discussion has moved to quality and moved away from 'I have a map app you have a map app,'" Halbherr said over coffee at his division's office in Berlin last week. "People start looking at how precise it is."

Nokia bought Chicago-based map provider Navteq for US$8.1 billion in 2008 and has thousands of employees making constant improvements to its location product, part of a push to stand out from the iPhone and devices running Google's Android software. The method contrasts with that of Apple, which licenses location data from various players including TomTom and OpenStreetMap.

After five straight quarters of losses, the maps push is part of Nokia's effort to reverse falling sales. Advertising for its Lumia 920 and Lumia 820 smartphones set to start selling before the year-end holiday shopping season highlight the new location features built on Nokia's in-house maps.

BRANCHING OUT

Nokia, based in Espoo, Finland, is also building a business of its own for its maps, selling them to Amazon.com, Yahoo!, Daimler AG's Mercedes-Benz and Nikon.

While Nokia was forced to play catchup after it misjudged the success of the iPhone, it continued to pump money into the location unit over the past several years. It now has data covering 100 navigable countries, up from 27 countries at the time of the Navteq purchase.

Nokia has thousands of workers gathering and sorting data collected on roads, public transportation and popular sites. The Lumia 920 and 820 include City Lens, which uses so-called augmented-reality technology, allowing users to hold up their phone to see tips on stores and restaurants. The phones also include driving and public transport instructions that used turn-by-turn guidance and offline maps.

TWO-HORSE RACE

Still, rather than saving the maps and location data for itself, Nokia is striking deals in a bid to become the dominant location-services provider. The agreements announced so far are only the start, with Nokia targeting carmakers, electronics companies and all other so-called original-equipment manufacturers, Halbherr said.

"Amazon is just the beginning," Halbherr said. "We are talking with OEMs and we will work with any OEM who needs a location platform. They all need one and they only have two choices."

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Nokia and Google have emerged as the providers of the two largest and most comprehensive location-software systems, said Martin Garner, an analyst at CCS Insight in London. Nokia has won deals with companies such as Yahoo, Microsoft and Russian search engine Yandex, which may prefer Nokia because it is less of a direct online competitor than Google, he said.

"They are both trying to establish a position where they are the maps platform of choice," Garner said. "Nokia is winning with other web players and it has been on a bit of a roll during the past 18 months."

RESEARCH SPENDING

Nokia signed a mapping-services deal with Yahoo in 2010, agreed to provide location services to Microsoft's Windows software last year and said this year it would work with Amazon and Oracle.

Nokia's location and commerce unit spent 81 per cent of its €283 million (US$364 million) of second-quarter sales on research and development, according to the company. Both Nokia and Google use cars to accumulate data that help improve its maps' accuracy and reliability.

"There is a bit of an arms race, for sure," Halbherr said, talking about investments Nokia and Google have made to become the top players. "Google and Nokia are good evidence of what it takes."

Apple, which touted the map features as a key software change in the iPhone 5, built its navigation application using external data amid a growing battle with Google. It had previously used Google's maps.

"We believe Google Maps are the most comprehensive, accurate and easy-to-use maps in the world," said Sierra Lovelace, a Google spokeswoman. "Our goal is to make Google Maps available to everyone who wants to use it, regardless of device, browser, or operating system."

Apple has faced a slew of user complaints and was criticised by gadget reviewers who said Apple's map app fails to give public-transportation information and sometimes gets confused when giving directions. Apple CEO Tim Cook apologised to customers, and Nokia weighed in with a Twitter posting after the iPhone 5's debut weekend.

 'FEELING LOST'?

 

"Feeling LOST this Monday?," Nokia said in the posting. "If you had Nokia Drive, you wouldn't. :) How's your smartphone maps app treating you so far this week?"

"Search is a serious business," Halbherr said. "It's about quality. Once you get routed to the wrong place you get really, really annoyed. I think what the Apple incident has created is a shift to quality."

Trudy Muller, a spokeswoman for Apple, declined to comment.

Nokia and Google both have advantages to cement their leadership in maps. While Google's Android is the most popular smartphone operating system, Nokia is the No. 1 seller of cheaper phones in many emerging markets in Asia and Latin America. Nokia sold 83.7 million mobile devices in the second quarter.

Nokia's location services are adding users each day and the number of daily transactions for its map products will jump to billions in the next 24 months from tens of millions last year, Halbherr said.

"Our clear goal is to become the leading location cloud company, with more transactions against location requests than any other player in the market," he said.

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