GPS as commodity: TomTom slashes expectations for navigation devices

GPS as commodity: TomTom slashes expectations for navigation devices

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

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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.

Topics: Banking, Enterprise Software, Hardware

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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21 comments
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  • RE: GPS as commodity: TomTom slashes expectations for navigation devices

    Screw both of them and give me a Google Car.

    Too bad it's going to be Nevada only for quite a while.
    Aerowind
    • RE: GPS as commodity: TomTom slashes expectations for navigation devices

      @Aerowind Amen! The Nav companies have been gouging us for many years with artificially-inflated prices on equipment that is now trivially included inside most smart phones. They've been gleefully hosing us on service fees and map updates, too. I will lose zero sleep when they disappear. It is a prime example of karma. GPS will be built-into all cars standard and consumer GPS devices will slowly go *poof*.

      *Side note* We can only hope the same thing happens to the recording industry after treating their customers so poorly for so long.
      BillDem
  • RE: GPS as commodity: TomTom slashes expectations for navigation devices

    Also start to give new meaning to their "LifeTime" maps or traffic meaning the lifetime of the company, not the device (but then again, this is not something new)

    Only 1 of our 3 existing cars have dash navigation. Got a TomTom for my wife's car & am stuck with a Navigon for our other car. Both of our Nokia Nuron's have the Ovi Maps, but pretty much worthless if you don't have a data plan active (even with the maps downloaded & active GPS signals).

    At least if TomTom drops support for this, the sting won't be as bad as with the Navigon!
    jhimes
  • Cell phone is a nice backup, but a dedicated device is better

    In my opinion, a dedicated device is far superior to the one located in your cell phone. Granted the cell phone application is mostly "free" these days, but think about what that device is supposed to do for you. Making and recieving calls, so if you are in the middle of a route and someone calls you what do you do? Not to mention when your cell phone losses reception along the way. The sensitivity of the GPS reciever also tends to be better in dedicated units. I will say that an in-car solution makes the most long term sense, but I still like to have my own when I travel.
    geier
  • RE: GPS as commodity: TomTom slashes expectations for navigation devices

    I use a dedicated GPS when needed and will continue to do so. I've been told by others that using the GPS runs down their battery quicker. Also, as mentioned with the data plan, it's another expense and more money going to my phone provider. No thanks.
    pwhite42
  • RE: GPS as commodity: TomTom slashes expectations for navigation devices

    "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."

    It's about time that auto makers put GPS into vehicles as STANDARD EQUIPMENT. When you can buy a GPS for $100 there is no justification for an auto maker to be charging $1500 for the device built in.
    WindowWasher
    • RE: GPS as commodity: TomTom slashes expectations for navigation devices

      @WindowWasher Amen and Amen! Most of the built-ins are way too expensive for what is offered. Especially if you consider that the info is from a DVD in many cases and you pay through the nose for an "updated" one.
      mcnedan
    • Exactly what I told the Nissan dealer...

      when shopping for a car.<br><br>He mentioned the GPS as a nice feature, and when I asked him about updates, he was non-committal, but I mentioned that my daughter had a GPS system built into her car, and updating the maps would cost more than just simply buying a stand-alone system with lifetime map updates included.<br><br>I basically told the dealer that, navigation systems built into cars was redundant in today's mobile electronics world. He kind of agreed and I started looking at other cars that didn't include built-in navigation systems. Why pay over $1000 for a system when the mobile devices could perform the same functions and a lot more inexpensively. <br><br><br>With mobile devices which can perform the functions of a lot of electronics gear inside the car, perhaps it's time that the automobile manufacturers started recognizing that, perhaps they don't need a navigation system, nor a stereo. Just include a basic 10 inch monitor in the dashboard, to which anyone could connect their smartphones or iPads or iPods, either through Wi-fi or cable. That would render automobiles a lot less expensive, hopefully. Meanwhile, the monitor would need to have a sensor which could recognize when the engine is turned off, and could then warn the owner to "take your mobile device" with you.
      adornoe
    • Car design cycles make good GPS difficult...

      @WindowWasher with car design cycles locking in equipment months or years before a model introduction, and then manufacturing cycles keeping the product static, no wonder built-in GPS is so expensive and poorly designed. My Dodge came with factory nav, but I would rather use the inexpensive TomTom unit I bought a couple years ago - much better user interface!
      randysmith@...
  • RE: GPS as commodity: TomTom slashes expectations for navigation devices

    I saved a bundle buying an update DVD on EBay for our Honda Pilot. Honda wanted anywhere from $150 to $200 for the update. How much will the dealers raise the price of the car for "standard" navigation built in. It is a nice option, but it is not worth the price they usually want.
    pwhite42
  • Dedicated GPS vs Phones

    Dedicated GPS devices win for screen size and built-in maps (assumming they are up to date). No data connections to worry about (unless you want live traffic updates). But I have an HTC HD2 with 4.3" screen, loaded with CoPilot and maps loaded on my SD card. So, I have most of the advantages of the dedicated GPS on my phone. I don't need a data connection to navigate. And with bluetooth in my car, I can take and make phone calls while the phone runs the map program in the background until the call is done.
    brucegil@...
  • RE: GPS as commodity: TomTom slashes expectations for navigation devices

    We have replaced dedicated GPS for forestry field work with Google Maps on Android. It is less accurate, but adequate for our purposes (site location within 100m). Outside of 3G range, the GPS continues working fine, recording tracks and points that can later be opened as a Google Maps or Earth overlay and downloaded to ArcGIS. This has saved us $2500 per person on hardware and software. The ROI on smartphone GPS is very high. The added capability for navigation to a site is gravy. In fact, if the phone function of my Android didn't work, I wouldn't care - it's the least important function of my 'phone'.
    tom@...
  • RE: GPS as commodity: TomTom slashes expectations for navigation devices

    I stuck my toe in the GPS pool last month with a refurbished Garmin Nuvi that I picked up for $80. I don't/won't have a smartphone because I'm too cheap to pay the monthly fees, and too absent minded to be comfortable with losing a device worth several hundred dollars. A $20 Tracphone works just fine for my needs.

    After using the Nuvi for a month, I'm still not thrilled with its navigation capabilities; in fact, I find the trip computer to be its most useful feature. As long as you are aware of their limitations, a GPS is still an interesting tool.
    S_Deemer
    • RE: GPS as commodity: TomTom slashes expectations for navigation devices

      @S_Deemer I'm like you, but I recently switched over. You can get a Android phone for Virgin Mobile and pay $25/month. I actually only bought the phone for $150 to see what all the smartphone hubbub is about and didn't actually purchase service. Believe it or not, the GPS still functions without cellular or wifi service.
      Mwendo
  • Dedicated vs Smartphone

    The consumer is right - the consumer is always right. My personal experience is a little different to the above.
    I regularly drive a colleague's car with a built-in navigation device. He bought a TomTom; The TomTom has to be better in order that people buy it, so it is much easier to use than the built-in (we still haven't found out how to disable the built-in device, the best we've managed to do is turn the sound off) and the TomTom plots better routes.
    I have a TomTom in one car and use Google Maps on a smartphone in my other. The TomTom plots better routes (by around 5% for long journeys involving motorways though in cities i think the difference is much greater) and doesn't need a data connection.
    Your experience may differ, but you can pay for a dedicated device on the savings on fuel costs alone for a typical driver doing 12000 miles per year (about 1/3 of which need a GPS - rest are routes I already know). And TomTom, with iQ routes, appears to be "streets ahead" of the other dedicated devices
    HugoM
  • Stop with the Google Maps

    Google Maps (or probably Google Navigation is what most people are really talking about) is not a full-fledged navigation solution. The primary flaw is that it cannot start a route, or recalculate a route, without internet connectivity. This is a fatal flaw when you are lost in a rural area.

    I use CoPilot on Android. The user interface is optimized for auto use, not cell phone use. My biggest complaint is the lack of integration with Android, say, picking a street address from Maps or Contacts and starting CoPilot for that destination. This is supposed to be fixed in the upcoming release. The second complaint is that their Points of Interest is controlled by a third party with no apparent user interaction mechanism. Even with those complaints, it is superior to Google Navigation for satnav.
    kmarsh@...
    • RE: GPS as commodity: TomTom slashes expectations for navigation devices

      @kmarsh@... Not saying the alternatives are superior to the dedicated PND, just saying they're out there and good enough to use for enough folks that the trend is impacting PND sales.
      andrew.nusca
  • RE: GPS as commodity: TomTom slashes expectations for navigation devices

    When most people have a GPS in one form or another, why wouldn't sales be declining? Mine's three years old, why should I even look at buying another one.
    shanedr
  • RE: GPS as commodity: TomTom slashes expectations for navigation devices

    The navigation units built in to cars are unusable, inaccurate junk. Do you really want the marketeer who designed the Edsel designing your GPS interface?
    Vesicant
  • No Surprise There :P

    Karma is at it yet again :D These companies have been forcing their customers into paying for stuff like Map updates on their dedicated GPS devices.

    Luckily, due to competition, they removed that price tag from the app updates ;) Thus, more and more iPhone users like I have no reason to spend $45 on a dedicated GPS device (then additional $20+ monthly fees) when we can easily get most* of the benefits for FRE.....cough.....excuse me, $60 :)

    *The only TomTom specific benefit I've seen on a friend's dedicated GPS device which isn't available on my iPhone is "Road Side Assistant" B-) Yup, no need for any cellular data if you don't care to take full advantage of getting instant map updates from <b>anywhere</b> or even submitting map corrections of your own the instant you find them on the road :p
    MrElectrifyer