Nokia Oyj (NOK1V) plans to spend $100 million backing companies that develop intelligent-car technologies, joining the likes of billionaire Elon Musk and Google Inc. (GOOG) in betting that future vehicles will be smarter and more connected.
The investments, to be made by a new Nokia fund, are meant to support the mobile-technology company’s digital-map business, Nokia said today. It’ll be run by Nokia Growth Partners, the venture-capital arm that manages about $700 million.
Nokia is rebuilding itself and expanding to new fields after selling its mobile-phone unit to Microsoft Corp. (MSFT) for about $7.5 billion last month. While Nokia now gets most of its revenue from wireless-network equipment, the Espoo, Finland-based company is also seeking to make its maps business a stronger competitor against rivals including Google.
“We’re seeing innovation that’s happening across the auto ecosystem through the combination of mobility and the Internet,” Paul Asel, a partner at the Nokia venture-capital arm, said in an interview. “The car is really becoming a platform like when the mobile handset became a smartphone and all the apps and services developed around that.”
Nokia built its location-technologies business by buying Chicago-based map provider Navteq Corp. for $8.1 billion in 2008 and 3-D map-technology maker Earthmine Inc. in 2012. Nokia provides map data to Amazon.com Inc., Microsoft, Yahoo! Inc. and four out of five car-navigation systems, a crucial segment as future connected-device systems use more location data.
Nokia is discussing the new fund today at the Global Mobile Internet Conference in Beijing.
Shares of Nokia fell 1.1 percent to close at 5.27 euros in Helsinki. The stock has gained 78 percent since Nokia agreed to sell the handset unit to Microsoft in September.
Carmakers are introducing smarter dashboard navigation systems, adding features such as real-time traffic information and automated calls to emergency services in case of accident.
Manufacturers are also gradually adding automated-driving systems that may ultimately lead to self-driving vehicles. Mountain View, California-based Google, operator of the largest Web-search engine, has been testing driverless cars in the U.S.
Toyota Motor Corp. said in October it will introduce systems in about two years that will enable cars to communicate with each other to avoid collisions. Detroit-based General Motors Co. is planning vehicles by 2020 that will be able to drive themselves on controlled-access highways.
Musk, who leads Palo Alto, California-based Tesla Motors Inc. (TSLA), said a year ago the electric-car maker is considering adding driverless technology to its vehicles, calling it a logical step in the evolution of cars. Tesla vehicles already include Internet access and connections for services such as roadside assistance and stolen-vehicle location.
“People tend to look at BMW, Tesla and Google, but we think of this as a global play,” Asel said. “There’s also innovation happening from a different perspective in China and India that impacts how this plays out. Some of these car manufacturers may adopt services faster than the established ones to gain a foothold.”
To contact the reporter on this story: Adam Ewing in Stockholm at email@example.com