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TomTom Cites Continued PND Slide In North America

Amsterdam – North American retail-level sales of portable navigation devices (PNDs) fell 39.4 percent year-over-year for 2011’s fourth quarter and 30 percent for the full year, according to TomTom.

The unit drop was 4 million for the fourth quarter and 10.6 million for the full year, TomTom said in reporting its fourth-quarter financial results.

The European PND market shrank by 10
percent to 11.3 million units for the full year.

The PND market remained challenging,
“especially in the U.S.,” said CEO Harold Goddjin, but it is “still very
sizable and profitable.” The company raised its North American unit share
sequentially to 26 percent from 25 percent, he noted.

The North American market’s decline
in the fourth quarter accelerated from previous quarters’ decline, with first-quarter
unit sales declining 19 percent, second-quarter units down 27.3 percent, and
third-quarter sales declining 27.6 percent.

In forecasting the 2012 PND market,
Goddjin said there “remains uncertainty about the rate of decline in the years

Industrywide gross margins have
remained “relatively stable,” but the world economy has driven the sales mix
more to the value end, pulling down average selling prices “somewhat,” said CFO
Marina Wyatt.

Because of the PND market’s slide, TomTom’s
fourth-quarter and full-year revenues slid 31 percent to 357 million euros and
16 percent to 1.273 billion euros, respectively. The company forecasts 2012
revenues slipping to 1.1 billion euros.

Fourth-quarter net profits fell 77
percent to 11.8 million euros, including a 13.5 million euro restructuring
charge. The company swung to a full-year loss of 439 million euros due to a
large second-quarter one-time impairment charge on goodwill and other
intangible assets of 512 million euros.

Although the company’s PND revenues
fell in the quarter and year, sales in the company’s OEM automotive,
business-solution, and licensing operations grew during the two periods, but
they accounted for only 34.6 percent of the company’s full-year sales.

The company said it will increase
its focus on these growing parts of its business.