TomTom announced yesterday lower than expected revenues in the first quarter, with an operating margin ranging between 0% and 10% (instead of the usual 20%).
This is not surprising given the impact of the price war we have been seeing in the recent months. The prices and margins of entry level PNDs are plumeting, while still making for the biggest part of the market.
What does it mean ? To our opinion, it indicates even more than PND manufacturer need to :
1) beef up their PNDs with additional services that can be sold to end-users, and generate revenues through subscriptions (e.g. traffic, weather, speedcam, gas prices, parking availability, etc)
2) convince PND owners to buy higher-end models to benefit from these services
Traffic information is clearly one example of a service that people will pay for, and it is no surprise TomTom has been closing a number of agreements with Vodafone in this respect. But as more connected PNDs hit the market this year and in 2009, we expect PND manufacturers to be very creative and launch a number of value-added services that will make a difference. And NAVX will actively contribute to this business :-)
c est normal que tomtom baisse sur le marche des GPS.pasd de SAV por telephone correct et pour les joindrent beaucoup trop d attente et bien sur payante.j ai un 750 go live et il bugg constament pas de solution il est obselete me repond tomtom le nouveau logitiel est trop lourd pour le disque dur.pourtant il n a que 14 mois alors pouquoi ne pas l avoir signale plus tot.alors j en est achete une autre marque.et mon tomtom me reste sur les bras.merci tomtom.ca me fait perdre 200€ de perdu
Posted by: bosquet dominique | 16 August 2012 at 14:06