“Shares in Dutch navigation device maker TomTom NV have surged on news that the company will supply map data to Apple Inc.,” The Associated Press reports.
“They rose 12 percent to €3.653 ($4.56) in Amsterdam on Tuesday,” AP reports. “TomTom said it struck a deal to supply the U.S. hardware giant with ‘maps and related information’ and it won’t disclose any other information.”
AP reports, “TomTom has performed poorly in comparison to larger competitor Garmin Ltd, and in April reported a €1.5 million first quarter loss, with sales down 12 percent to €233 million.”
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“Analysts said the deal is a win for TomTom, which has been suffering from declining sales of its personal navigation devices, or PNDs. Standalone satellite-guided direction-finding devices, or satnavs, were the basis of TomTom’s rise; now they are at the center of its current difficulties,” Maarten Van Tartwijk reports for The Wall Street Journal. “With direction-finding software available on smartphones and tablet computers, sales of standalone satnav devices are in long-term decline.”
Van Tartwijk reports, “Rabobank, which upgraded TomTom to buy from hold following the news, said the financial impact can be significant. ‘We believe that TomTom will not only deliver maps, but will also offer content and its highly valuable [high-definition] traffic service,’ the bank said in a note.”
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MacDailyNews Take: This fall, more people will be using TomTom’s solutions than Garmin could imagine in their most hallucinatory dreams.