Nokia (NYSE:NOK) just dropped its HERE Maps app from Apple's App Store, saying that iOS 7 has caused problems with the program. Nokia's maps technology is one of the few things the company will hold on to if the deal to sell its devices and services division to Microsoft (NASDAQ:MSFT) goes through, but compared to its other revenue streams, dropping HERE from iOS won't make much of a difference.
Focus on the future
As part of Microsoft's potential deal to take over Nokia's devices and services, the Finnish phone maker will keep three main parts of its company: network and solutions, HERE maps, and its advanced-technologies division.
To see the impact of HERE being removed from Apple's app store we need to look no further than how much net sales Nokia's mapping service brought in this past quarter: 211 million euros, or about $291 million. Now let's compare that to Nokia's second-highest revenue generating division, network and solutions, which is 2.59 billion euros, or about $3.57 billion.
So that's $291 million to $3.57 billion.
Sequentially, revenue from HERE maps was down 9% from Q2 to Q3 this year, and down 20% year over year. Nokia said the dip from the previous quarter was because of low sales to vehicle customers, who use the service for on-board navigation, but was still profitable.
While Nokia obviously wants to grow its HERE mapping service and license it to other companies, it's nowhere near as important as the networking and solutions business, and doesn't have much of an impact on the company's bottom line. So while it's disappointing to see the company pull HERE from Apple's popular iOS 7 platform, the monetary impact is negligible at best. The HERE app on iOS was free for iOS users anyway, so it was more of way to expose users to the service.
Nokia said that it pulled the app because "recent changes to iOS 7 harm the user experience." The company hasn't said if it will bring back the app later and is directing iOS users to the mobile-website version to access the service.
With Nokia's devices and services division sale pending to Microsoft, HERE maps has become more of a public face for the consumer side of Nokia. But considering that HERE is such a small revenue generator compared to the much more lucrative network and solutions business, the latest drop from iOS shouldn't be too troubling. Nokia's network and solutions division was profitable this past quarter and came close to the company's devices and services revenue in Q3, and brought in slightly more than devices in Q2 of this year. As Nokia continues to transition, investors should keep tabs on how the company can grow its network and solutions division -- and worry less about how its mapping service is doing.