TomTom Beating PND Drums
By Amy Gilroy -- TWICE, 8/4/2008
AMSTERDAM, THE NETHERLANDS — TomTom said it expects this year to launch a more intense effort to gain U.S. market share while introducing more high-end personal navigation devices (PNDs in the United States later this year as it tries to counter the trend toward entry-level product, CEO Harold Goddijn said.
The step-up models will come at a time when replacement sales will become more important, he said. While most PND sales are currently from first-time buyers, he said, replacement sales will begin to have a "meaningful effect" on the market by 2009.
Though the market has expanded at a rapid pace, it still has room to grow, and in 2008, the company forecasts PND sales of 20 million each for Europe and North America, for a combined 40 million, up 54 percent from a combined 26 million in 2007.
"We're encouraged that consumer demand held up very nicely in light of all the economic developments," Goddijn said. The performance shows PNDs are "part of every day life and a useful tool" rather than "a luxury product."
Although analysts have said the worldwide balance in PND and GPS-equipped cellphones could tip in favor of phones by the end of 2008, Goddijn said, "We don't expect it to be a threat now or in 2009 … We see further proliferation of digital maps through a variety of devices, and we can play there. We think the PND form factor is far superior to the user experience you can deliver on a mobile phone. People are used to that and it will be a very important category going forward."
TomTom's purchase of Tele Atlas, one of the only two current GPS map makers, helps position TomTom to be a player in many areas of navigation, including GPS on cellphones and in-dash devices. "The pricing between TomTom and Tele Atlas is at arms length and will continue to be at arms length and fair to everyone else," he added in referring to Tele Atlas map availability to PND competitors.
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