Amsterdam, The Netherlands - TomTom said it is still on track to offer an iPhone navigation application this summer, and that its app will debut on the App Store in the U.S. and Europe simultaneously.
Speaking on a quarterly earning call today, TomTom CEO Harold Goddijn said, "The launch planned for the iPhone this summer is on track." He also told analysts that TomTom's car cradle for the iPhone, already announced, will be sold from the TomTom Web site and from retailers "and hopefully that will include Apple stores."
The statements came shortly before Navigon announced Wednesday that its iPhone GPS app had posted on the App Store at a limited, one-time fee of $70, beating TomTom at becoming the first "onboard" iPhone app from a recognized GPS brand.
On its call this morning, TomTom presented second-quarter earnings for the period ending June 30, reporting lower sales and earnings but an improved cash position.
Net profit was down 61 percent from the period a year ago, to the U.S. equivalent of $28.5 million, compared with $74 million a year ago. Revenue fell 19 percent to $524 million, down from $645 million last year. The figures, however, were significantly higher than analysts had expected, said reports.
Sales of personal navigation devices (PNDs) were "as expected" said the company with TomTom shipping 2.6 million units, down 20 percent from the period a year ago and TomTom's average selling price falling to $112 during the quarter, down from $131 in the year ago quarter.
The company said the North American market for PNDs grew 2 percent to 3.7 million units for the quarter while the European market declined by 12 percent to 3.8 million units, down from 4.3 million for the period last year.
TomTom said its North American market share was 18 percent, down by 1 percentage point from a year ago while its European market share grew by 1 percent, to 45 percent.
"Live" services are starting to catch on, TomTom said, permitting the company to charge fees for extra services such as its HD Traffic, which traces the road speed of participants to create live traffic reports.
Goddijn said, despite the economy, "We're quite encouraged that the overall demand for our products, both in Europe and North America, has held up quite reasonably. We have been affected, but the decline in Europe is managing and there's growth in North America, albeit small ... We can see we're making good progress in routing ... in HD Traffic ... We see a shift ... happening slowly but surely where navigation devices are used as a more dynamic always-on information source in a car."
The CEO estimated that up to 30 percent of PND customers have previously bought or owned a PND, indicating a strong upgrade market.
TomTom also said its shelf placement in the U.S. is up and it is selling more SKUs; however, it is not lowering prices to match discounting from other brands.
Also during the quarter, TomTom had a successful rights share offering that helped the company raise $570 million that was devoted to buying back debt. TomTom said it will reduce its debt from $1.432 million to $957 million after the rights issue.
TomTom said it also increased its cash from operations to $139 million, up from $78 million in the year ago quarter.