*Justin* schreef op 22 mei 2015 15:05:
suggestief stuk in wallstreet journal. Toevallig ook de club waar de nokia here berichten steeds naar uitlekken
TomTom's Maps Need Clearer Route to Profits -- Heard on the Street
22-05-15 14:57:43
Door Thao Hua The Wall Street Journal TomTom may be nearing the end of a tunnel, but it is investors who could be blinded by the light. Once a global leader in portable personal navigation devices, TomTom's core market has diminished in recent years with the rise of smartphones. The company has restructured, adding new products such as wearable technology and boosted investments in location services software used in autonomous driving applications. The latter is piquing investor interest, particularly since automakers and technology companies are steering away from relying on Google as it increasingly competes in the same sphere as its customers. Shares in TomTom are up nearly 80% this year. One alternative to Google Maps is HERE, which could be sold by its owner Nokia. HERE is used in about 80% of the cars sold with a built-in navigation system and by a host of companies that rely on its navigation software, including TomTom's U.S. rival Garmin. The crucial role of navigation services, particularly in the future of autonomous driving, has led to a bidding war for HERE, highlighting the value of such businesses. Regulatory scrutiny of any deal involving HERE is likely. But the uncertainty over future access to its software has helped renew interest in TomTom: the Dutch company could be left as the only independent global map content provider of similar scale. TomTom covers about 44 million kilometers compared to HERE's 43 million kilometers, Morgan Stanley notes. Entry barriers are high, and the next generation of maps needed to implement safety features automatically is even more dynamic and nuanced, requiring 3D features for example that can be updated in real time. HERE and TomTom have a lead over Google Maps in such technology. There is some evidence that TomTom is benefitting. Earlier this year the company renewed its agreement with Apple, which is also developing self-driving cars, and booked mapping contracts with Volkswagen among other carmakers. The trouble is that sales growth in automotive isn't expected until 2016 and actual profits could be several years away, Barclays reckons. The company's automotive unit still lags HERE in research and development and needs to boost investment, which would further dent earnings. Meanwhile TomTom is still reliant on consumer hardware for more than half of its sales. That market is still in decline. Sales from its GPS sports watches are growing but accounted for only about 5% of total revenue in 2014. The company is also facing tougher competition in wearable technology, for example, with the introduction of the Apple Watch. Against that backdrop, TomTom is trading on 38 times forward earnings. Given the company has yet to show that it can sustainably grow earnings from its automotive advantages, investors may be getting ahead of themselves. Write to Thao Hua at
thao.hua@wsj.com (END) Dow Jones NewswiresMay 22, 2015 08:57 ET (12:57 GMT)
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