AMSTERDAM (Reuters) Dutch navigation device maker TomTom said on Wednesday it was broadening its revenue base faced with competition from free navigation on smartphones and declined to comment on possible takeover bids. The company said its third-quarter net profit took a hit due to a currency charge but maintained its full-year outlook despite increased competition from free navigation software from Google and Nokia smartphones. The personal navigation device (PND) industry, led by TomTom and Garmin, has been hit badly by competition from navigation-enabled smartphones. Garmin CFO Kevin Rauckman estimated last month that smartphone competition was deflating annual PND sales.
Jon Peckman, a nine-year veteran of Garmin International, remembers trying to crack CE and mass-market retail accounts with plain industrial-style navigation products. Over the years, though, Peckman and a receptive retail market have watched Garmin’s original navigation products—designed for aviators and backcountry explorers—evolve into the eMap, eTrex, StreetPilot, and nuvi. Nuvi, in particular, has become a sexy mass-market must-have that continues to set new directions for navigation devices by helping retailers drive revenue and capture incremental customers. “They created a product that made my sales calls a lot easier,” said Peckman, now Garmin’s director of sales for key accounts. Garmin’s story—from the
Garmin’s Super Bowl ad was a tough act to follow. But the GPS device manufacturer did just that by increasing Q4 revenue by more than 90 percent to $611 million, up from $319 million from Q4 in 2005, the company said. Earnings per share for the year grew 64 percent, said CFO Kevin Rauckman, helping to send share prices up 8.1 percent yesterday, or $4.29, to $57. Gross and operating margins were strong, Rauckman said, coming in at 50 percent and 31 percent respectively. Total revenue for the year hit $1.77 billion, up 73 percent from $1.03 billion in 2005, the company said.