Satnav maker TomTom lifted by Apple deal
AMSTERDAM, June 12 — Vehicle navigation systems maker TomTom has struck a deal to license its maps to Apple Inc, seeking to tap into demand for cheap or free navigation software for smartphones and tablets which has so far posed a challenge.
Shares in the Dutch firm, down 40 per cent over the past year, jumped as much as 15 per cent in early Tuesday trading.
Yesterday, Apple took the wraps off its own mobile mapping service and improved the search capabilities of its Siri voice assistant, taking the fight to internet search giant Google .
“The deal between TomTom and Apple is a big boost for TomTom given its ambitions ... and the strength of the Apple brand and its enormous (and still growing) installed base,” SNS Securities said in a research note.
However, SNS said it was hard to put a value on the deal for TomTom as the Dutch company’s fee will largely depend on advertising revenue and may include a small nominal fee per map.
TomTom did not provide further details of the deal with Apple, which makes devices such as the iPhone and iPad, but its shares jumped to the highest level since May 2 on the news. At 0755 GMT (1555 Malaysian time) the stock was up 13.5 per cent at €3.715.
TomTom faces intense competition in its core personal navigation device, or PND, market as consumers increasingly opt for free or cheap navigation software as well as popular gadgets like smartphones and tablet computers.
TomTom, which competes in the PND market with Garmin and in the commercial digital map market with Google and Nokia, has turned to targeting higher-growth areas and new markets.
It increasingly sells navigation devices built into car and truck dashboards, rather than the standalone versions, and sells mapping data and real-time traffic services through smartphone apps and other devices.
The company said it covers more than 200 countries and territories, and its maps cover more than 35 million kilometres globally. — Reuters