TomTom reassures investors
Dutch navigation device maker TomTom reassured investors by keeping its 2010 outlook intact in the face of stiff competition from free navigation on smartphones.
TomTom's business model and that of its main competitor, Garmin, have come under pressure after Google and Nokia began offering free navigation features on their GPS-equipped smartphones earlier this year.
TomTom Chief Financial Officer Marina Wyatt acknowledged that the market for personal navigation devices (PND) was under strain.
"The PND market or segment .. is not the most exciting product right now," Wyatt said.
"When you are thinking of your consumer electronics purchase it is just not the most exciting thing on the market," Wyatt told Reuters, adding that the sector needed more innovation.
TomTom has responded to the threat from Google and Nokia by shifting its business mix toward high-margin, value-added services, making its PNDs a smaller portion of total income.
TomTom said the North American PND market gained 27 percent during the second quarter to 3.3 million units from 2.6 million in the previous quarter.
TomTom has high hopes of a new open software architecture, which will be available in September in 33 countries in its recently announced GO 1000 LIVE device.
Net profit rose 69 percent to 34 million euros, while revenue fell 2 percent from a year earlier, broadly in line with analysts' forecasts and helped by lower financing costs.