TomTom Not Worried Over Smartphone Navigation Apps

One of the first things we thought when TomTom announced that it would finally be making an honest-to-goodness iPhone app was this: "what will this do to standalone GPS sales?" It's a reasonable question--TomTom has long since made its profits by selling hardware with routing software built in. The app within was just a portion of the equation, while the actual device was where the money was.

With smartphones becoming ever more pervasive, one has to wonder if profits will sink as individuals purchase cheaper navigation apps over a new, dedicated personal navigation device. According to TomTom's own VP of marketing, there's no heavy sweating going on at the TomTom labs. In fact, he's excited about the notion to push TomTom's routing platform to those who may have been avoiding a standalone PND thus far.



And given the wildly high prices of all dedicated nav programs in Apple's App Store, we guess we can see why. The US and Canadian version of the iPhone program from TomTom rings up at $99.99. That's just a few dollars less than a bottom-end TomTom GPS device, and may be even more than used devices on the secondhand market. And with the iPhone app, you've got to worry about your phone battery dying and you've got to exit the app should a call come in while you're driving. Fairly annoying to say the least thanks to the iPhone's inability to truly multitask.

When asked if he thought the emergence of phone-based nav programs were a threat to standalone devices, Mr. Murray replied with the following:

"We’re trying to make TomTom navigational systems available to people across all platforms that are important to consumers. We continue to see a robust demand for [portable navigation devices] going forward. This is an opportunity to grow, not a threat to us, especially in the short term."



From experience, we'd say the usability of a dedicated NAV system is far better than iPhone applications. You can multitask, the UI reacts more quickly and the screen is generally larger. We definitely see the smartphone stealing away a sliver of market share eventually, but we think we agree with Tom here in that it won't be significantly negative. Do you care to agree or disagree?


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