Barclay Communications
Free navigation doesn't scare TomTom
Thursday 25th February 2010
TomTom has stated that it doesn't feel threatened by the offers of free navigation software from Google and Nokia. When free nav arrived last year there was industry speculation that it spelt doom for paid navigation.
The TomTom group, a Netherlands manufacturer of satellite navigation devices, has not made any marked strategic changes since Google launched its free nav software in the USA in October, followed by the January announcement that Nokia would release free nav internationally.
Although TomTom has forecast flat revenues and earnings for 2010, it has captured 10 percent of the market for navigation built into new cars. The company entered this market last year. It has also launched premium subscription services such as highly accurate traffic information and offers its own basic paid-for application for the iPhone.
Harold Goddijn, co-founder, CEO and majority owner of TomTom, pointed out that the company already gives away its own free map and nav app with TomTom personal navigation devices (PNDs). He is optimistic that PNDs will continue to earn good revenue.
In addition he said that the rapidly increasing use of mobile navigation had increased the importance of digital maps, including maps by Tele Atlas. The group bought Tele Atlas for €2.9 billion in 2007. This arm of the business now generates about €50 million, which is close to 10 per cent of group quarterly revenues.
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