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Nokia agrees to sell HERE to automotive industry consortium

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Nokia completes next stage of transformation with agreement to sell HERE to automotive industry consortium at an enterprise value of EUR 2.8 billion

Nokia completes next stage of transformation with agreement to sell HERE to automotive industry consortium at an enterprise value of EUR 2.8 billion

Espoo, Finland – Nokia today announced an agreement to sell its HERE digital mapping and location services business to a consortium of leading automotive companies, comprising AUDI AG, BMW Group and Daimler AG (the “Consortium”). The transaction values HERE at an enterprise value of EUR 2.8 billion with a normalized level of working capital and is expected to close in the first quarter of 2016, subject to customary closing conditions and regulatory approvals. Upon closing, Nokia estimates that it will receive net proceeds of slightly above EUR 2.5 billion, as the purchaser would be compensated for certain defined liabilities of HERE currently expected to be slightly below EUR 300 million as part of the transaction. Nokia expects to book a gain on the sale and a related release of cumulative foreign exchange translation differences totaling approximately EUR 1 billion as a result of the transaction.

In April 2015, Nokia announced a review of strategic options for HERE in light of its proposed combination with Alcatel-Lucent. The announcement of this sale to the Consortium concludes that strategic review process.

Rajeev Suri, President and Chief Executive Officer of Nokia, said: “With this step we complete the latest stage of Nokia’s transformation. We integrated the former Nokia Siemens Networks, divested our Devices & Services business, and have now reached agreement on a transaction for HERE that we believe is the best path forward for our shareholders, as well as the customers and employees of HERE. Going forward, we will focus on our planned combination with Alcatel-Lucent. Once that is complete, Nokia will be a renewed company, with a world-leading network technology and services business, as well as the licensing and innovation engine of Nokia Technologies.”

HERE is developing a location cloud that harnesses the power of data generated by vehicles, devices and infrastructure to deliver real-time, predictive and personalized location services. In the automotive industry, where it serves most of the world’s leading automakers, its focus is on developing precise and accurate mapping as well as services that will enable an entirely new class of driver experiences, including highly automated driving. The company also serves the world’s leading enterprises and Internet players, including Microsoft, Samsung and SAP, and offers highly rated apps to consumers using Android, iOS and Windows Phone.

“I believe today’s announcement is a very good outcome for HERE, its customers and employees. The new ownership structure of HERE will allow us to accelerate our strategy, further scale our business and fulfill our intent to become the leading location cloud company across industries,” said HERE President Sean Fernback.

HERE has been a separate operating and reportable segment for financial reporting purposes for Nokia with a non-IFRS operating profit of EUR 46 million on net sales of EUR 552 million for the first half of 2015, and a non-IFRS operating profit of EUR 31 million on net sales of EUR 971 million for the full year 2014. In reported terms, HERE generated an operating profit of EUR 28 million for the first half of 2015, and an operating loss of EUR 1 241 million for the full year 2014, with the latter including a EUR 1 209 million charge for the impairment of goodwill. At the end of June 2015, HERE had 6 454 employees. Nokia plans to report HERE as a discontinued operation from the third quarter of 2015 onwards. HERE will continue to operate as a business of Nokia until the closing of the transaction.

Upon closing of the HERE transaction, Nokia will consist of two businesses: Nokia Networks and Nokia Technologies. Nokia Networks will continue to be a leading provider of broadband infrastructure software and services. Nokia Technologies will continue to provide advanced technology development and licensing. Nokia’s proposed combination with Alcatel-Lucent is expected to close in the first half of 2016, subject to customary closing conditions and regulatory approvals, and will create an innovation leader in next generation technology and services for an IP connected world.

Nokia suspended its capital structure optimization program in conjunction with the announcement of the proposed combination with Alcatel-Lucent. As previously stated, Nokia intends to evaluate the resumption of a capital structure optimization program after the closing of the proposed Alcatel-Lucent transaction.

About Nokia
By focusing on the human possibilities of technology, Nokia embraces the connected world to help people thrive. Our three businesses are leaders in their fields: Nokia Networks provides broadband infrastructure, software and services; HERE provides mapping, navigation and location intelligence; and Nokia Technologies provides advanced technology development and licensing. www.nokia.com

About HERE
HERE, a Nokia company, is a leader in navigation, mapping and location experiences. We build high-definition (HD) maps and combine them with cloud technology to enable rich, real-time location experiences in a broad range of connected devices – from smartphones and tablets to wearables and vehicles. To learn more about today’s announcement, visit the HERE 360 blog.

Source: Nokia

IoT to generate massive amounts of data to help business growth

 

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IoT to generate massive data, help grow biz revenue
Internet of Things (IoT) will churn more than 20 trillion gigabytes of data by 2025, fueled by increasing broadband speeds, and is expected to generate new revenue for businesses.

Fueled by increasing broadband adoption and access speeds, Internet of Things (IoT) will churn more than 20 zettabytes, or 20 trillion gigabytes, of data by 2025.

Growing multi-device ownership also has been identified as a key driver of IoT and cloud adoption, according to research from Seagate Technology. The storage vendor said broadband speeds in the Asia-Pacific region were projected to be the fastest worldwide, quadrupling to 87Mbps in 10 years. Across the globe, broadband access speeds would average at 72Mbps. At those speeds, a two-hour high-definition movie could be downloaded in 7 minutes, compared to about 28 minutes today, Seagate said.

The Asia-Pacific, however, was expected to see disparate adoption rates in 2025, with developed markets such as Singapore and Hong Kong each clocking 95 percent broadband penetration rate, while South Korea would hit 99 percent. In comparison, countries such as India and Indonesia would only see adoption rates of 10 percent or less.

According to Seagate, by 2025, more than 40 billion devices were expected to be web-connected and the bulk of IP traffic would be driven by non-PC devices. Machine-to-machine devices were projected to account for 64 percent of these connections, with smartphones contributing 26 percent, and tablets 5 percent. Feature phones would only account for 4 percent of these connections, and laptop PCs a paltry 1 percent.

In terms of verticals, Seagate said the automotive sector would prove to be the fastest-growing segment for IoT, pushing more than 3.5 billion device units in 2025, compared to just 200 million in 2014. The storage vendor pointed to devices such as connected onboard diagnostics and automated safety systems that were expected to become more pervasive.

Consumer IoT was expected to be the largest market segment, generating 13 billion devices by 2025, with growth fueled by increasing adoption of devices such as smart watches and activity trackers.

Some 11 million smart watches were sold last year, while activity trackers clocked at 32 million, according to Seagate. It further estimated that the overall wearables market would be worth US$10 billion next year, pushing 170 million units by 2017.
Sales of fitness wearables would triple to 210 million in 2020, from 70 million in 2013, and smart garments adoption would see a compound annual growth rate of 48 percent between 2015 and 2020.

Enterprises also are recognizing the potential of IoT to help generate revenue, according to a recent study by India’s Tata Consultancy Services (TCS), which polled 795 executives worldwide.

More than 80 percent of companies that invested in IoT saw increased revenue, the research found, with the average growth rate from such initiatives clocking at 15.6 percent. Some 9 percent generated 30 percent more revenue as a result of their IoT efforts, while market leaders in this space saw a higher revenue increase of 64 percent.

TCS added that 7 percent of organizations were planning to spend some US$500 million on IoT initiatives this year alone, with another 12 percent looking to invest US$100 million in this space. Some 3 percent said they had plans to pour in at least US$1 billion to support their IoT initiatives. Across the board, organizations expected their IoT budgets to see increases each year, with spending projected to climb 20 percent to hit US$103 million by 2018.

A popular use of IoT technologies was for tracking customers through mobile apps, with 47 percent of organizations tapping the devices for such uses. Some 50.8 percent turned to IoT to monitor the performance of their products.

While the deployment of IoT appeared to be stellar, organizations did point to some key challenges that were holding back further adoption. Corporate culture, for instance, proved to be especially challenging as businesses struggled to hone their employee’s ability to change the way they thought about customer service, products, and processes.

In addition, organizations noted their challenge of convincing the leadership team about the potential of IoT and to invest time and resources in the technology.

Questions also were raised about the need to ensure security and reliability, as well as manage big data and data integration across the enterprise systems, especially as IoT technologies become more pervasive.

Source: Eileen Yu. ZDNET

Microsoft and Toshiba will build in-car IoT systems

Toshiba and Microsoft have signed a memorandum of understanding (MOU) to jointly develop solutions for the Internet of Things (IoT). Leveraging Toshiba’s innovative IoT devices with Microsoft’s Azure IoT Cloud infrastructure, Toshiba will deliver state of the art sensor-data-driven applications in various market segments starting in calendar year 2015.

In this partnership, Toshiba will provide XaaS (X as a Service) making use of its extensive in-house technologies such as ApP Lite (Application Processor Lite), in-vehicle driving recorders, sensors and cloud storage services and Microsoft will provide IaaS (Infrastructure as a Service), private line services (Azure ExpressRoute) and advanced analytics (Azure Machine Learning) as part of Microsoft Azure.

Together Toshiba and Microsoft will offer innovative IoT enterprise solutions, starting with the transportation and logistics market.

Source: Toshiba