The much publicised take over of global digital mapmakers, Tele Atlas was seen as a shrewd purchase by TomTom. Since Tele Atlas is one of only two digital mappers, the takeover allows TomTom greater control of costs and licensing opportunities.

TomTom is also profiting by enabling consumer personalisation of their devices, through custom map and “celebrity voice” addons. They are also leading the market with innovations including TomTom LIVE, a system of real-time traffic updates and route re-calculations. They have also formed partnerships to allow for web-based information services to direct you to the nearest take-away, Chinese restaurant or newsagent and intuitive applications to calculate and direct you to the cheapest fuel outlets.

With a sound strategic business model, philosophy and programme of innovation TomTom remains a prudent long-term investment. One hidden group of winners along with the shareholders are the charities supported by Pieter Geelen. A Dutch magazine recently named him as one of the most generous philanthropists in the Netherlands having given away an estimated €132m to good causes and more recently through The Turing Foundation. The primary aims of the Foundation revolve around an eclectic mix of causes; leprosy, education, nature conservation and art are all close to Pieter Geelen’s heart with each area operating independently and having its own individual goals, budgets and strategy. The foundation was awarded the official Charity status by the Dutch fiscal authority in 2006.

Vodafone’s plan to buy Wayfinder “could mean that TomTom and Vodafone will look to approach each other further in the area of navigation services for mobile phones,” Wing-Yen Choi, an Amsterdam-based analyst at Theodoor Gilissen, said, adding that this could enhance revenue.

Choi, who has a “buy” recommendation on TomTom shares, said the technology sector in general is doing well today, after being “punished harshly.”

TomTom and Vodafone work together in countries including Germany, the Netherlands and Portugal to collect and distribute traffic information for users.  Tele Atlas, the maker of digital maps that was bought by TomTom this year, cooperates with Wayfinder.

“Technology is still being bought and sold if it answers a real need and we believe that’s what we do,” said Vigreux at the launch of the Go 940 LIVE. “We announced our results yesterday and we’re still alive and kicking – the margins are still there.”

Here’s a summary of the company’s published financial results for the 3rd quarter:
For the first three quarters of this year, TomTom’s total PND shipments reached 7.6 million units, the company revealed. TomTom’s third quarter results saw revenue of €429m, with a gross profit of €240m. However, the company have lowered their shipment target for 2008. They adjusted the outlook for 2008 to 12-13 million units from its previous projection of 14-15 million units as demand for navigation solutions has grown at a slower pace than expected, according to the company. So what they are saying is, it hasn’t slowed, it just hasn’t grown as fast as expected this year due to the financial crisis. This is a global change as TomTom now expects the PND markets in Europe and North America to each grow to 18 million units this year, compared to 20 million units expected previously.

For the third quarter of this year TomTom estimated that the Sat Nav device market in Europe grew more than 15% from the previous year to approximately 4.2 million units, and the North American market grew by close to 100% to 3.1 million units.

TomTom shipped 2.53 million Personal Navigation Device (PND) products in the third quarter, down 18% sequentially but up 17% on year. This means that TomTom continue to hold a leading market share in Europe of around 45% and a North American market share of over 20%. Gross margin grew to 47% in the third quarter from 42% in the previous quarter, whereas ASPs (average selling prices) improved to 136 euro (US$180) from the previous quarter’s 131 euro.

Reuters also spoke of TomTom yesterday as they reported on the dramatic price cuts that all navigation devices had gone through this year. Although the prices are unlikely to drop further in 2008 now that the Dollar is stronger against the Euro, TomTom are offering alternatives, such as special offers and their new outlet store for refurbished devices.

“We are concerned that high gearing and exposure to weak consumer spending may result in a need for refinancing before the end of 2009.”

TomTom’s shares, which were initially €17.50 in May 2005, have dropped by 25% since last Thursday, when the company held an analyst day, and over 80% since October 29 last year, when shares hit a record high of €66.70. The fall has been attributed to TomTom’s debt since purchasing Teleatlas earlier in the year, however, competitors Garmin have also seen a significant drop in share prices, and the Sat Nav market as a whole has seen a decline after such a high paced beginning.