“The future has not yet been doomed, so the destiny shall be opened up by yourselves” – The Terminator 1
So does the realistic business world. It was competitive yesterday and it is cooperative today, who knows how it would be tomorrow? Everything is transitory tense. Perhaps it is because of this, the chaos world that is full of variable can be so worthy of expectation.
At the late of Dec. 26 of last year, Navinfo announced that Navinfo, Tencent and Government of Singapore Investment Corporation invested to build SIWAY Company in Netherlands jointly with respective shareholding ratio of 40%, 18% and 42%. The newly-built SIWAY Company will acquire 10% of equity of HERE, the shares of HERE held by AUDI AG, BMW AG and Daimler AG shall be reduced with corresponding equal amount. Meanwhile, Navinfo will establish a joint venture company jointly with HERE in China, of which the main business is to provide content-end and server-end solutions, including map data and dynamic information of China, for clients who use HERE global location service platform.
The reason why this news is concerned lies in the dramatized effect behind the acquisition event. Tencent and Navinfo formed a team to participate in competition for acquisition of HERE in May, 2015. At that time, the financial groups of competition for acquisition were mainly such several companies: Tencent, Navinfo and EQT; Baidu, Uber and Apax Partners; three big automobile manufacturers in Germany; three private equity firms in America; and acquisition of part equity of HERE proposed by Microsoft. Moreover, a share of Navinfo was also suspended for several months. When everyone thought that Navinfo was determined to win, it exited from competition for acquisition suddenly. The behind reasons were tacit all the time, so the event also faded out from everyone’s vision gradually. Who would have expected that the closed door will be open again?
Now the emergent result always has a kind of lost and found of Navinfo to HERE. Even there is relevant media rated it as the significance of “lifetime”. It can be seen that this acquisition has a great significance to Navinfo, or there may be larger harvest this time.
The global automobile industry is facing a technological revolution, of which the core is internet of vehicles and driverless, while map is exactly the core technology of the above-mentioned two technologies. HERE can provide available data of 200 countries, built-in route planning navigation function, off-line map, 3D guidepost and 29,000 unique architectural indoor maps of 45 countries, own more than 700 urban public transport information of more than 50 countries, provide driving navigation of 94 countries, visual and acoustic rate-limiting warning (off-line voice of street name of more than 60 countries and 50 languages) and own over 85,000,000 local navigation and user data related to restaurants, cafes, stores, museums, etc. integrated with train, steamship, bus, trolley and walk information as well as peripheral services of life. The more important thing is that it has established cooperative relationship with Toyota, Volkswagen, BMW and other mainstream automobile brands to be nearly in monopoly position, of which HERE navigation system is adopted by about 80% of automobile manufacturers in the global.
All of these are irresistible temptation to Navinfo who has deep ploughed in the domestic market for many years. Although the acquisition proportion shrinks sharply from the original 100% to 10%, whether to own HERE at one hundred percent does not affect the final result to the goal of Navinfo to open up international market.
Originally, Navinfo has long-term and good cooperative relationship with HERE, while the acquisition is just to further promote the strategy and business synergies of both parties. It can be said that Navinfo and HERE as well as three big automobile manufacturers in Germany will establish strategic alliance that can provide global map data and location service solutions from capital level, which will be conducive to Navinfo to occupy leading superiority in high-precision map, driverless, location service and other fields in future; and further deepen the cooperative partnership between Navinfo and main automobile clients to strengthen strategic defense to Baidu, Amap and other opponents to some extent. Navinfo is the biggest winner from this point of view, which is big reward with small investment and is rather worthy of counting more than one year’s time cost in!
Tencent becomes the eldest brother to lead the way
Navinfo acquired AutoChips Inc. recently participated and operated by Tencent. As the second shareholder of Navinfo, Tencent provided funds and efforts, which naturally is not living Lei Feng and has own scheme: driverless behind this acquisition as well.
Tencent is the last one in BAT to involve in driverless field. Alibaba unites automobile manufacturers to release internet automobile jointly and driverless car of Baidu has been on the way to run. It can imagine the lagging pressure of Tencent in this field.
Now, “map provider + automobile manufacturer” have become one mainstream cooperative mode in the driverless field. Moreover, “map provider + automobile manufacturer” have become the absolute mainstream mode after Google who once dominated totally turned to cooperate with automobile manufacturers to develop driverless car.
While the goodwill expressed timely by three big automobile manufacturers in Germany and HERE at this crucial moment let Tencent turn around the decline of slow progress in the driverless field with one action and even strike opponents in waxing and waning. Tencent showed pity to Baidu silently when it saw the driverless platform of Baidu was changed to some domestic self-independent brand automobile from the previous BMW. The power of HERE indeed can let Tencent overtake in the curve and the rest is how Tencent and Navinfo digest the resources of this acquisition cooperation quickly to launch landing products fast.
Co-operative age of map providers and automobile manufacturers
Nowadays, what do automobile manufacturers need have not only simple map data any more, but the integrated services based on navigation application. The previous mode of map providers to sell license and copy has gradually weakened and the relevant cooperative business modes have changed according to changing circumstances as well.
It is beneficial to unify data standard and utilize data interface specification to let automobile can upload the data collected by vehicle-mounted sensor to cloud to update map after the union between HERE and Navinfo, thereby bringing better experience and value to users in the real-time navigation, real-time traffic and other service aspects, moreover, the most important thing is that map providers will have more rights of speech in the negotiation with automobile manufacturers for this reason. If nothing unexpected happens, this set of effective mode explored by HERE and three big automobile manufacturers in Germany will occur on more domestic automobile manufacturers. In addition, the joint venture company of Navinfo and HERE plays an important role here.
Meanwhile, this set of mode is also a giant pipeline. When Chinese automobile brands open up overseas market, HERE map will authorize related map data to Navinfo to let Navinfo can make overall arrangement of overseas market smoothly; when the foreign automobile brands enter into Chinese market, it is possible to let the data of HERE and Navinfo integrate each other really through the mode of authorization as well.
The alliance is stronger gradually
The latest news on Jan. 3 showed that Intel Corporation announced that it had approved to acquire 15% of the equity of HERE, a digital map company in Germany, and the transaction would be finished in the first quarter of 2017. The specific terms of the transaction were not disclosed. As one part of the transaction, Intel Corporation and HERE will research and develop jointly “a conceptual product with high scalability that can provide high-definition real-time map update for automatic drive”. Intel Corporation plans to design and display the framework used for concept validation to optimize driving safety and predictability through the investment to HERE.
It is not the first investment of Intel Corporation in the automobile industry. Automobile is an important field for Intel Corporation, but Intel Corporation needs to occupy a place in such industry. Other measures taken by Intel Corporation in the automobile industry include the acquisition of Itseez and Yogitech, strengthening of safety and navigation function of automatic drive car; the investment of at least US$ 250,000,000 in such industry; positive participation of each big automobile exhibition; and the establishment of group with special automatic drive technology in Nov. 2016. The ambitious of Intel Corporation is long-standing in the internet of vehicles and driverless fields.
Undoubtedly, three big automobile manufacturers in Germany hope to establish an alliance of internet of vehicles and driverless technologies with a solid relationship through the splitting to HERE resources.
The layout pattern of internet of vehicles and driverless will be rewritten
Chinese market has become an important giant economic entity in the whole world due to giant stock, amazing cardinality and terrible growing rate. Three big automobile manufacturers in Germany exchanged steadier partner of Chinese market by virtue of the payment of 10% of goodwill of HERE. Moreover, the join of Intel Corporation let this alliance be stronger.
Now, it seems that multiple parties participated in the acquisition of HERE can get the biggest benefit in the transaction. The multiple-win situation will affect the related extensive margins and at least the game pattern of domestic driverless field will be rewritten due to this, so the driverless market of 2017 is also more worthy of expectation due to this.