GPS vendor feels competition from smartphone apps

TomTom: Sat navs are ?not the most exciting?

Dedicated GPS devices are “not the most exciting” category, the chief financial officer of sat nav vendor TomTom has said.

Speaking to Reuters as the firm reported its second quarter results, TomTom CFO Marina Wyatt said: "The PND market or segment… is not the most exciting product right now."

"When you are thinking of your consumer electronics purchase it is just not the most exciting thing on the market," she added, going on to suggest that more innovation is needed in the sector.

The company’s net profit rose 69 per cent year-on-year to €34 million, while revenue dropped two per cent.

Wyatt told Reuters that the strength of the dollar was to blame for a drop in margins. Gross margin dropped three percentage points from Q1, down to 51 per cent.

"Normally margins would be up in this quarter but they are down due to the weak euro to the dollar," Wyatt said, adding that this effect would continue in the third quarter.

TomTom has suffered due to increasing competition in the navigation sector from smartphone applications. Nokia and Google now provide free apps, with German firm Skobbler also moving into the market.

Earlier this year, the firm’s vice president of sales and marketing for the UK and Ireland, Damian Woodward, told PCR that dedicated PNDs were not under threat of being replaced by mobile applications.

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