Nokia announced today (May 5) that it has started a $100 million fund to invest in a number of companies working on connecting cars.
Finnish mobile communications equipment maker said the fund will be run by the company's venture-capital arm Nokia Growth Partners, which manages approximately $700 million, according to Reuters.
It will also cooperate with Nokia's location unit HERE.
"Our new $100 million venture fund launched today further underlines our belief that the connected car is a significant growth opportunity," Nokia Chief Executive Rajeev Suri said in a statement, according to Reuters.
Nokia is trying to rebuild itself and expand to new fields after selling its mobile-phone unit to Microsoft Corp. in April for $75 billion.
Though Nokia now gets most of its revenue from wireless-network equipment, the company is also trying to improve its maps business to compete with rivals like Google.
"We're seeing innovation that's happening across the auto ecosystem through the combination of mobility and the Internet," said Paul Asel, a partner at Nokia Growth Parnters, according to Bloomberg Businessweek. "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 was able to build its location-technologies business by purchasing map provider Navteq Corp. for $8.1 billion in 2008 and 3-D map-technology maker Earthmine Inc. back in 2012, according to Bloomberg.
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.
Toyota said this past October it will introduce systems by 2016 that will allow cars to communicate with each other to avoid collisions. General Motors is planning to release self-driving vehicles by 2020.
Tesla CEO Elon Musk said a little over a year ago that the electric-vehicle maker is hoping to add driverless technology to its vehicles within the decade, calling it a "logical step."
"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."
Nokia will discuss the new fund today at the Global Mobile Internet Conference in Beijing.
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