TomTom profits fell 29 percent for the fourth quarter but the results were better than many analysts predicted.
TomTom is planning for a 10 to 15 percent drop in portable navigation device (PND) sales globally in 2011 it said Friday. It plans to counter that by moving into sports and fitness GPS, starting with a Nike product for runners that ships in April.
Sales were lower than expected during Black Friday and are down during other seasonal specials compared to when the market was in high growth mode, said CEO Harold Goddijn on a conference call with analysts.
“This year is going to be about really pushing out connected navigation through the premium and mid-range products.” added CFO Marina Wyatt of PNDs.
TomTom captured roughly a third of the PND market in North America in Q4. Exact share was 32 percent, up from 29 percent in Q4 in 2009.
PND sales in Q4 2009 were 8.6 million, falling to 6.5 million in 2010.
For TomTom, net income fell during the December quarter to the equivalent of about $71 million (52 million euros). But that was better than the 43.7 million euros analysts expected, said Bloomberg.
Revenue fell 3 percent to 516 million euros.
As PNDs decline, TomTom continues to transform itself into a content and services and OEM provider. It is selling traffic data, location based services and it sells navigation devices to companies including Renault, Mazda and Fiat and it will supply an embedded PND for the Subaru Forester and Impreza in the US. It also licenses maps and it expanded its agreement with MiTAC to include Magellan.
Another new TomTom market segment is a service that helps companies manage and reduce their CO2 emissions while reducing costs at the same time.
For 2011 TomTom expects flat revenue and earnings per share. In the consumer segment revenues should be down slightly and revenue should be up in the automotive segment.