Tomtom grabs market share in shrinking market

Despite the shrinking market for navigation systems, Tomtom saw its turnover and profit increase in 2010. According to the company, this is a result of an increased market share and a smaller than expected decrease in sales prices.

Tomtom’s market share in Europe grew from 46 percent in the fourth quarter of 2009 to 49 percent in the same quarter in 2010. The total size of the market for PNDs in Europe was the same as in the previous quarter at 3.5 million units, but has shrunk compared to the year before, when 4.3 million pnds were sold in the fourth quarter. Tomtom also expanded its market share in North America in the last quarter of 2010. This came to 32 percent. Tomtom’s market share for the full year has not been disclosed.

Not only did the market share grow, the selling prices for PNDs also fell less quickly than expected. In addition, the Content & Services division performed well with a turnover growth of 16 percent to 98 million euros, while the turnover of the Automotive branch grew by no less than 52 percent to 55 million euros. For example, existing agreements with car manufacturers for the Blue&Me-Tomtom product were expanded to include the Fiat Doblò and the Fiat 500, while Tomtom will also supply the Toyota Aygo.

Turnover grew by 3 percent in 2010 to 1,521 million euros, while net profit increased by 24 percent to 108 million euros. Tomtom managed to reduce its net debt in 2010 from EUR 442 million to EUR 294 million. However, operating profit fell by 16 percent, from 221 million euros to 186 million euros.

Despite a further shrinking consumer market for PNDs, the company expects few changes in turnover and operating result for 2011. Tomtom expects a lot from the sports and fitness market. The company recently announced a partnership with Nike for a groomer navigation product.