Nokia HERE Posts €233m in Revenue, Down 18% in 2Q 2013

Nokia last week announced their financial revenue for the second quarter of 2013. Nokia group net sales were 5.7 Billion, down 24 percent against the same quarter last year. Its map and location-based services division HERE posted a revenue of €233 million, down 18 percent year-on-year.

HERE external sales were €195 million, up 8 percent. Commenting this figure Nokia explained that: “In the second quarter 2013, the year-on-year increase in external HERE net sales were primarily due to higher sales to vehicle customers as well as non-recurrence of a negative sales adjustment made in the year ago quarter related to historical license fees in the normal course of business for a particular customer.“

Internal sales were €38 million, down 63% year-on-year from €103 million. “The year-on-year and sequential declines in internal HERE net sales were due to declines in sales, including lower recognition of deferred revenue, primarily related to our Smart Devices business unit,“ wrote Nokia.

It is interesting to see that HERE external business is now representing 84% of its revenue against only 63% in the same quarter last year. While we do not have precise figures on that, it is highly possible that Nokia is no more the biggest customer of HERE. Garmin? BMW? Others?

It definitely validates our long time analysis that – apart Google – no single player (i.e. Nokia, TomTom) has enough power to turn map data ownership into a competitive advantage. The cost of worldwide map maintenance and improvements is too high to be fully endorsed by a single organization.

With this new HERE branding, the NAVTEQ and Nokia Maps assets are probably on the right track for a spin-off that would release some value for Nokia’s shareholder’s.

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