Repost of a previous reply I made regarding Google's recent offerings in the navigation/location spelling the end of TomTom amd Garmin. Feel free to disagree and/or post a response.
"FWIW, I personally think this impacts TomTom much worse than Garmin. TomTom's stated intentions earlier this year were to replace sagging PND income with well-designed mobile applications across various OS platforms. Sales of the TT iPhone app are already well under projections, with fewer than 100,000 copies sold to date in my estimation, slightly under 80,000 thru TomTom's 3rd quarter according to them. Knock off 30% of the gross revenue for Apple's cut and it's readily apparent the income doesn't make up for too many pnd's. They've given up (for now) on development for the Androids, as they probably should. Blackberry's may also be out of the question as well, as I expect them to offer their own app including live traffic within the next few months. Apple's between a rock and a hard place with deciding what to do with Google's turn-by-turn, but in the end I do expect them to relent and allow it in the iTunes store. In essence, three of the top five projected handset platforms will be impacted or out of TomTom's market, roughly 40% going by 2012 projections. They'd better be targeting Symbian. I bet Navigon is. Top that off with price reductions on the premium-priced mobile nav apps from TomTom and Navigon that are nearly guaranteed to be necessary if they are to remain players. There's already several worthy nav applications that are free or nearly so, and Google is now preparing to change the rest of the rules.
And here is where I see TomTom pummeled much harder than Garmin. Only $160 million of TomTom's 3rd quarter revenue came from non-pnd related sales. They have only one viable market right now where growth could have been realistically expected. . . mobile, altho they have made a few inroads into the dash-mounted/OEM market, but even that could be impacted by Google and/or new data delivery methods within a couple of years. I don't see any direction TomTom can turn to replace lost revenue if Google stays on course. In addition note that TomTom's debts are still quite high. Banks will want their money no matter where the market turns.
On the Garmin side I estimate approx. $300 million this quarter will come from non-pnd sales with Garmin's significant markets in aviation, marine, fitness and handhelds, plus their own partnerships in automotive OEM. Yes, even Garmin will need to replace the roughly 50% of their revenue coming from pnd's before much longer, but they did keep to their plan of developing related markets where there's limited competition rather than flip-flopping or changing direction in mid-stream. Instead of hanging their hat on the mobile tree, they took a much more conservative approach, catching flak from some analysts by not aggressively jumping in to a now very crowded and fluid market. Even with their nuviphone development (with an Android version expected soon), they took the safer path of partnering with Asus, spreading the risk. I'd agree whole-heartedly they were way too slow to roll out their phone line and may have missed out on an opportunity, but their overall slow and cautious entry into the mobile marketplace now doesn't look so dumb, at least to me.
Ready for the biggest advantage? Garmin has no debt. If fact they have a little more than $1.5 Billion in cash/securities they can put their hands on. That's leaves doors open for acquisitions in complementary technology companies, or investment in promising markets. At worst, a fair return for investors should they become a takeover target. TomTom doesn't have that luxury, and after Google's recent announcements, investors and loans are going to be near impossible to get IMHO. That puts TomTom in a very precarious position from where I stand, Garmin to a much lesser extent."
