Time was whenever a Gps navigation device was the must-have item in a self-improving gadget-lover s gear bag. But as years used on and mobile phones started to usurp the place functions, they ve grown progressively irrelevant. Sure, they still serve an objective, but we ve been counseling the likes of Garmin and TomTom for a long time to complete some serious self-evaluation when they expect to be with considerably longer. TomTom seems to possess truly taken this to heart, and therefore are using the appropriate actions.
As Boss Harold Goddijn diplomatically place it after their earnings report:
The PND clients are important and can remain a significant part in our business and revenue, however the market size in absolute terms is diminishing and we have to adapt our costs, most of which are variable plus some aren t.
Quite simply, the amount is diminishing fast (sales lower 23% this last quarter) plus they can t manage to be running design and manufacturing infrastructures which were set up having a much bigger market in your mind.
The brand new focus is going to be on automotive and embedded systems. This is a place where Google (the greatest danger for their business undoubtedly) has very little foothold whatsoever except inside a couple of special cases. Meanwhile people still connect the TomTom brand with location and Gps navigation, and also the growth of such software in cheaper cars means the marketplace is coming up. They are able to ride the wave all over again, growing a brand new market while iOS and Android eat that old one.
It won t be considered a bloodless restructuring, though. Jobs is going to be lost and shipped overseas, also it s likely they ll need to proceed to cheaper manufacturing to remain in the black. Meanwhile, shares returned back a little in the news, though they re still a purchase of magnitude from where these were a couple of years.
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