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We asked Garmin's Jim Alpiser at the Aircraft Electronics show in Washington, D.C. if this signals the beginning of the end for big ticket portable GPS. "We recognized that the tablets on the market today are very attractive for a lot of reasons. It allows, number one, to get a giant display in the cockpit and get charts on there," Alpiser told us in this podcast recorded at the AEA show.
When you have only two major players in a market, the competitive differences are magnified. And if one coughs, the other sneezes. Such is the case with TomTom and NAVTEQ. Both companies have acquired or been acquired; experienced layoffs, and refocused their business model. The disruption can be directly tied to an explosion in the mobile device market. You would think this would be good for both companies? But in a market where everyone has a navigation device, and you are competing with a company that is both a client and a competitor (i.e. Google), what do you do?
Reorg
Today, TomTom issued a statement regarding the company's reorganization and we've posted the important news items; see the company's press release and All Points Blog about the layoff of 10% of their workforce. When I spoke with company executives this morning, they reiterated that the change to their business model would focus on faster time to market of products and the ability to leverage core assets that include traffic data and an adherence to the Navigation Data Standard (NDS). The NDS has been identified by TomTom as a means to help standardize how maps go into navigation devices. Charles Cautley, managing director of the Automotive, Enterprise & Government Business unit (AEG) for TomTom said, "NDS is hugely strategic for TomTom." Cautley believes that this simplifies content accessibility and the map compilation process.
TomTom sees that there is still lots of growth in maps, POIs and especially traffic products. In the traditional GIS and enterprise market, the company sees growth in various site selection applications as well as real-time information to engineers and city planners. TomTom wants to combine their map products, traffic information and geocoder, essentially a bundle of their strategic assets, and offer them to industry segments.
A focus on Dynamic Traffic Data
Late last year, TomTom released their Traffic Manifesto thereby attempting to stake a unique selling proposition in the navigation market. On a webinar yesterday (December 7), the company announced that they had captured 5 trillion anonymous GPS traffic measurements since 2007 and used the data to create a rich database of historical traffic profiles. The data goes into TomTom's HD Traffic products.
Why the upheaval in digital navigation? What's Changed?
Navigation is becoming pervasive," said Cautley. "Everyone can have navigation; more devices; in car units; or web at home. "[TomTom is] rethinking how you take advantage of navigation." TomTom wants to leverage both crowdsourced and probe data to create more accuracy in maps. "[These] new data are giving us tremendous information," said Cautley. "The strategy is a move to provide more dynamic content … Better quality and more value to our customers."
TomTom NV announced Thursday a plan to cut 10% of its global workforce (457 jobs, 255 of which are redundant) and reorganize its research and development program. R&D activities will be organized into 10 product units to improve ROI, and increase the control its salesforce has over what's being developed based on customer feedback, and speed time to market.
The company will take a EUR14 million charge in the fourth quarter, mainly related to the job cuts. The big loser for TomTom is the PND arena, which saw a 19% decline in sales on an annual basis in the third quarter.
- WSJ
Nokia plans to use signals from Russia's GLONASS satellite navigation network in its phones, along with GPS signals, as of next year. That's good news for Russia as it works to complete the constellation.
- Reuters
A victim in a MegaBus crash in New York State is suing the company. Among other complaints, the plaintiff argues that GPS would have prevented the accident in which the bus missed an exit and later ran into a low bridge. The company bans GPS devices from its busses.
ABI research reports that the Launch of Nike/TomTom’s GPS fitness watch and other promised products in the fitness GPS space will push shipments beyond the 10 million mark.
