Tencent, along with Chinese mapping provider NavInfo and Singapore’s sovereign wealth fund GIC, will jointly buy a 10 per cent stake in Here at a price of up to €241m, the companies announced on Tuesday. The purchase would reduce the shareholdings of Here’s owners, the German carmakers Audi, BMW and Daimler.
Providing maps for autonomous cars requires a technological leap. Maps designed to be read by people have a 10 metre accuracy level but autonomous cars will need to know where they are to the nearest centimetre.
“With the benefit of Here’s technology, we’re mainly planning to advance our in-car navigation systems and mapping services for driverless cars,” said a spokesperson for NavInfo, which provides map data for Tencent.
“This collaboration?.?.?.?facilitates Tencent’s exploration of future technologies including autonomous driving and artificial intelligence,” said Julian Ma, a vice-president of Tencent.
Tencent faces an uphill battle for smartphone map users in a sector dominated by Baidu and Alibaba’s recent entrant Amap, which it acquired two years ago from AutoNavi. Figures from iResearch, the consultancy, show that Baidu and Alibaba’s maps have around 200m monthly users each, whereas Tencent’s standalone map application has only 8m.
However, this figure would rise dramatically if it included the 850m users of the company’s messaging app WeChat who might use the app’s built-in mapping services — for instance, to share their location with friends.
“It’s very difficult for Tencent at this point to capture mass-market users,” said Bao Jun, analyst at iResearch. “To advance, they need to find a niche to develop in, such as navigation for autonomous cars.”
Baidu was the first Chinese company to pilot its fully-autonomous cars this November, when it let members of the public ride them in Wuzhen, a tourist city to the west of Shanghai. It is currently in talks with car manufacturers to sell a small number of fully-autonomous models in 2018 or early 2019, which would make it the first company worldwide to market such cars.
China only allows a small number of licensed domestic providers to make maps of the country because of national security concerns.
As a result, foreign mappers and open-sourced citizen-mapping projects are illegal. Although Here makes maps in almost 200 countries worldwide, it needed a domestic licensed partner — NavInfo — to map China.
All map data must be stored on Chinese servers and use the government’s co-ordinate system, which is designed to include errors of several hundred metres if combined with maps made from international GPS standards.
Here had net assets of €1.87bn at the end of the first half of 2016, and the parties to the deal estimate the company’s enterprise value to be €3.1bn