Why Apple should acquire Nokia | Hacker News Reader

Why Apple should acquire Nokia

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34 pointstristan_louis41 comments

Wouldn't it make more sense for Apple to buy TomTom or Waze before buying Nokia? TomTom is much cheaper and Apple already has a cozy relationship with it. Not to mention Nokia is already in bed with Microsoft.

NOK: $10B market cap TOM2: $800M market cap

Even then, TomTom comes with a lot of baggage. A savvy operations expert like Tim Cook would choke in disgust at the financial waste of such an acquisition.

Apple acquiring Waze makes the most sense. It only has 80 employees already in Palo Alto. It is still private and only has $67M in funding. Its only product is a mobile app. And its product is actually an advancement for navigation rather than stuck in the old world.

How would purchasing Waze address any of the perceived shortcomings of Apple Maps? And where does Waze currently get it mapping info? I kind of doubt that Waze has data sets that rival Google or Nokia, or even Tom Tom.

Waze is crowdsourced. So even if the original data comes from sources such as Tiger or OSM (which are known to be much worse than Google's), presumably data such as road vectors are continually tweaked from the driving data that the app collects. From the FAQ (http://www.waze.com/faq/):

    By simply driving with the app open on your phone, you passively
    contribute traffic and other road data that helps the Waze system
    to provide other Waze drivers with the most optimal route to their
    destination, including live traffic information. But you can also
    take a more active role by reporting on accidents, police traps,
    or any other hazards along the way, helping to give other users in
    the area a 'heads-up' about what's to come and contributing to the
    common good out there on the road.

    Some of the Waze community members with a passion for maps also
    take an even more active role by editing and updating the Waze
    map, itself. Most of the editing work is done on the Waze website,
    but some parts, such as the naming of streets, can be done through
    the application directly.

That doesn't really answer my question. It's still unclear to me where most of Waze's data comes from. Do they really have their own primary dataset? (If they're built on OSM, I fail to see how they can keep their data proprietary, given the OSM license.) Does it contain more accurate data than, say, NavTeq has? More coverage?

The bigger question is still how an acquisition of Waze would fill the shortcomings in Apple's Maps, which is somewhat separate from the question of where the data is coming from.

Waze does not use OSM as stated in its FAQ [1]. It uses TIGER from the US Census Bureau at least in the US [2]. Then it augments the maps with proprietary data gathered by users running Waze software on their phones and from people manually contributing corrections to the Waze data set. Waze has gamified this process by awarding achievements for the number of miles driven with the software running and for contributing corrections (e.g. road changes and mistakes).

Apple's Maps would benefit from buying Waze because Apple would get access to 1) Waze's accumulated modifications on top of TIGER, 2) Waze's software for collecting and distributing realtime changes to maps and 3) the talent of 80 employees that have deep knowledge of mapping software.

The maps from Nokia or TomTom might be better now, but the problem is they may have very inefficient ways of keeping those maps up to date and distributing the updated map data. For example, most GPS units have static map data which get a bulk update once per year. Whereas Google Maps and Waze can get updated maps in near real time along with live traffic information.

[1] http://www.waze.com/faq/#14

[2] http://www.census.gov/geo/www/tiger/

>hen it augments the maps with proprietary data gathered by users running Waze software on their phones and from people manually contributing corrections to the Waze data set.

All 100 of them?

Thanks for clarifying about their mapping sources. I assume they must do something similar in other countries.

As for why Apple would benefit, I'm afraid I don't agree. Sure, having a few dozen more employees with deep mapping experience would probably be great, but I'm not sure it's the real issue. Nor do I think it likely that the user-provided data would trump the quality of any of the major map players at this point.

If you look at the complaints that people are making, many of them down to public transit, poor proper name matching, and regional map quality. Of those, I doubt Waze will provide any meaningful improvement for Apple. To my knowledge, they don't touch public transit, because that's counter to their target. I seriously doubt they do well with proper name searches (do they even support it?) because their target is the commuter, not the guy looking for the nearest Chipotle. And for regional quality, I'd bet that they're weakest in the same areas that Apple is weak in.

I'm not sure why you think mapping data from Nokia or TomTom would be updated on a yearly schedule. The fact that non-connected GPS devices might be updated on that schedule doesn't mean that their databases are updated on that schedule, or that partners would be limited to updates on that schedule. Nokia and TomTom can, and almost certainly do, update their data constantly, just like Google Maps, and Waze, and undoubtedly Apple as well.

> And for regional quality, I'd bet that they're weakest in the same areas that Apple is weak in.

Yup. Japan on Waze: one big undifferentiated blob.

Waze seems to be a car routing product, and car routing certainly isn't Apple's weak point...

Some of the data is built from computer vision on aerial photos.

Plus a hostile takeover of Nokia would probably start a bidding war with Microsoft as white knight. That would cost way more than $10 Billion (if successful, which is a pretty big if).

But Apple doesn't need to buy Nokia. They could just license their mapping data like Amazon is doing.

> "Plus a hostile takeover of Nokia would probably start a bidding war with Microsoft as white knight."

If I were in charge of Apple and more evil, I'd do it just for that. Start a bidding war with the intention to lose it - and force Microsoft into an extremely expensive acquisition that it would have no hope of properly managing or exploiting.

Then again, it would be a $10bn game of chicken...

Out of curiosity, is such a move legal? Is there some sort of requirement that one bid in good faith or some such concept? As that would be a fairly nasty thing to do.

It's not only legal, it's standard business practice. One of the recent examples of this was when Google bid against itself during an auction for spectrum that it didn't want, solely to drive up the price. As long as you are not colluding with the selling party to drive up the price (in which case, this is illegal, known as shill bidding) - all is fair in an auction.

What's the point of switching one rival for the other? Just so they wake up after another 5 years that they need to give up on Nokia's maps, too?

According to Wikipedia, Waze is headquartered in Ra'anana, Israel. In Dec 2011 they had only 10 employees in Palo Alto.

Waze's product is dreadful, it looks like a kids game and the information is half way between a social network and a useful traffic information source. Contrast Waze with google's discreet color coded streets that show the same information and its clear why everyone loves google maps.

Mapping is an interesting area right now and Apple's poor performance in this area has opened a nice little market to fill useful maps for the average person, but Waze is not it. It would just be a waste of money for Apple to buy them.

For Bay Area driving, Waze is very good for traffic conditions. That alone makes the app a winner for me.

Their routing information has it's quirks. But, don't down play that "kids game...social network" aspect for actual driving info. Have you actually used it for day to day commuting?

From a friend in Israel, it is even more useful and very much a loved app there.

If it were only about maps, you may have a point on TomTom but I argue that it's much more than maps, if you read the article.

Has Apple ever made any acquisition even a portion this size? It would be a pretty big difference between Jobs Apple and Cook Apple to make a purchase this big. Given that the likely targets would be maps and patents, the rest of the business wouldn't be of much value surely? But winding up a company Nokia's size would be a brutal hit that would inflict a lot of damage in many different areas - to Apple almost as much as Nokia I'd guess.

Edit: Auto predict. Sigh

I think the NEXT acquisition, which brought Steve Jobs back, was in that neighborhood from a capabilities standpoint. From a dollar standpoint, you're right, it's substantially larger than what Apple has done in the past in terms of acquisitions.

I doubt it would be allowed by the regulators, but buying Nokia also gives you a lot of connections in places Apple does not have.

Apple could argue that they need to do it to counter the threat of Android. With all the claims of more Android devices being out in the market, it's an argument that could hold water with regulators and get such a deal approved as a result.

Nice article. A formatting nit: Having link hovers italicize means that hovering a link reflows the entire paragraph.

Example: http://makeagif.com/i/6KTHGR

And it's actually easy to end up in some infinite loop: http://i.imgur.com/IDR64.gif

Good point. I need to fix that one someday... I'm trying to find a way to deal with hovers in a better way. Maybe I should get rid of the italics altogether in that case.

I actually think they should acquire a carrier like tmobile... They always say they want to control "the entire customer experience from hardware to software".

Considering Apple is a global company, it wouldn't make sense to acquire the 4th largest carrier if all they get is some spectrum and nothing else.

How would T-Mobile (USA) help the iPhone across the board?

Honest question: Will the EU commission even approve the acquisition?

Most likely not, so good question. All that went through my mind when I read the post title was "Why Apple should acquire [Some Company With Way Better Maps]"...

Did you miss the part about patents? and mobile TV? and more patents? (oh yeah, and maps too :) )

With all the noise about Android being the biggest player, Apple could make a claim that it is a defensive move before Google goes against them in court. This may get regulators to approve it.

If the rumours are true about Nokia wanting to sell off their HQ in Finland, it seems Nokia is a bit desperate for money.

This could mean at some point (in the interests of getting some cash in the bank) Nokia could sell off their mapping division (NAVTEQ etc) to Apple.

Apple won't want products, considered by the market as inferior, to carry any association to themselves.

Nokia Maps as well as photo technology in their cell phones are considered quite highly. Nokia hardware is generally respected as well.

There are gems that Apple can mine.

Funny that ALU is mentioned given that the ADR is trading near >10 year lows

Which makes a deal with ALU even more likely if no cash has to change hands (ie. ALU gives APPL a large set of patents and get the networking business, making it either #1 or #2 in telecom as a result). That deal would probably bump ALU stock up.

How could Nokia suddenly do an about face heel turn away from Microsoft.

Hostile take over? Also, Elop's time is running out, so turning away from MS is possible in more than one way.

What if Nokia has a 5 year contract with Microsoft? Could they still end that somehow?

The patent thing actually makes it a very good acquisition target for Samsung as well.

It would be like Google buying Excite.

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