TomTom Ups GPS Share to 30%

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TomTom reported it swung back to profitability in the fourth quarter ended December 31, 2009, claiming it saw little impact from smartphone GPS and that it boosted its portable navigation device (PND) share to almost 30 percent in North America.
TomTom CEO Harold Goddijn said of smartphone GPS, “We see limited impact from this on our current revenue streams from PNDs, automotive and fleet management.” Instead he said demand for location-based applications will present new opportunities.
TomTom sold 100,000 downloads of its iPhone app in the fourth quarter. It shipped a record 5.1 million PNDs globally for the fourth quarter up 15 percent from 4.4 million in the quarter in 2008. For the full year, TomTom shipped 11.6 million PNDs globally, down 4 percent from 12.1 million in 2008. Sales for 2010 should be flat at about 11.6 million units, it said.
Total industry PND sales for North America grew 8 percent in the quarter year/year to 8.6 million units, up from 8 million units and TomTom’s market share increased to 29 percent from 20 percent. In Europe, however, PND sales decreased 13 percent from 4.9 million to 4.3 million units for the fourth quarter year/year.
The company claimed there is still room for growth and innovation in traffic delivery and maps. “Traffic information is a key investment area for us,” Goddijn said claiming TomTom will innovate in traffic accuracy, coverage and in predictive traffic in a growing number of countries, (although we don’t know if that includes the U.S.)
In maps, the company which owns map maker Tele Atlas said it will add features such as slope, lane and curve information. (These details are useful to new driver assistance products such as lane departure warning systems and early crash warning systems, which are a growing OEM and aftermarket segment.)
TomTom revenue increased one percent year/year to the equivalent of $725 million. The company earned $99 million compared to a loss of $1.3 billion in the same quarter in 2008 when TomTom took a write down on Tele Atlas, which it acquired in 2008.
TomTom said its average selling price for PNDs was $108 in the fourth quarter compared to $136 for the same period in 2008 or a 21 percent decline. The decrease in ASPs as due to the increased share of PNDs sold in the U.S. versus Europe as discounting is greater in the U.S., said the company.
Gross margin for the quarter was 46 percent—an increase of 1 percentage point compared to the period in 2008 and a decrease of 6 percentage points sequentially. This is explained by heavier discounting typical of the fourth quarter.
For Tele Atlas, revenue was down 8 percent for the quarter to $68 million from $75 million a year ago. Revenue for the year was $252 million down 6 percent from $267 million. Tele Atlas said it signed a deal with Samsung which will use its maps for its GPS-enabled devices.
The company also confirmed that Tele Atlas CEO Bill Henry will step down.
TomTom expects flat revenue and earnings per share in 2010 compared with 2009.
Source: TomTom
Photo: TomTom CEO Harold Goddijn

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