GPS as commodity: TomTom slashes expectations for navigation devices

Personal navigation device firm TomTom slashes guidance again, citing weak markets. Is the aftermarket GPS dead?

Dutch tech company TomTom revised its guidance again on Monday evening after sales of its personal GPS navigation devices took another hit.

The company cited weak markets, but the bigger trend is that consumers on both sides of the Atlantic are giving up their beloved devices in droves as their smartphones and cars pick up the navigational slack.

It writes:

Consumer electronics markets have been weak over recent weeks and this trend is ongoing. The size of the European PND market is broadly as anticipated and for the year as a whole is expected to decline by around 10%. However more consumers are opting for entry level products than expected and lower levels of inventory are being held in the channel.

The company competes primarily with Garmin, Navteq and Magellan.

[Kendrick: Smartphone for GPS Navigation is better than a dedicated device]

The company also said the slide was steeper in the U.S. than in Europe.

It said:

The North American PND market is experiencing a faster rate of decline than earlier in the year and we now expect this market to be down by about 30% for the year as a whole.

Tough times lie ahead for the company as automakers prepare to sell their way out of a recession with new vehicles that include navigational electronics embedded in the dashboard.

TomTom acknowledged that its Automotive, Business Solutions and Licensing businesses "are developing as expected" -- meaning the way to survive might be to pull out of the consumer market and sell directly to carmakers.

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