by Alyssa Oursler | June 12, 2012 2:45 pm
Last week, we told you about Apple’s (NASDAQ:AAPL) plan to forego Google maps for its own map app: not-so-good news for Google (NASDAQ:GOOG) — which has moved quickly from friend to foe of Apple — and GPS makers.
Navigation-system maker TomTom (PINK:TMOAF), though, has not only dodged the blow, but cashed in on it: Apple recently struck a deal with the Dutch company regarding the mapping service for the new iPhone and iPad software.
The details for the service have not yet been explained, but the agreement nevertheless marks a step in the right direction for TomTom, as the company has been trying to shift its focus from portable satellite-navigation devices to mapping software and services.
This is an obvious strategy, as smartphones have made GPS devices and the like obsolescent, evident by the shrinking market for such devices and shrinking revenues for the companies that produce them. TOM2 began producing portable devices in 2004, but the market peaked after just years and revenue and has been declining ever since. In just the past year, the market for personal navigation devices dropped 400,000 in Europe and 700,000 in America, according to The Wall Street Journal.
TomTom already sells mobile navigation apps that run on Apple’s iPhones and iPads, so the agreement could hurt sales of those apps on top of sales of GPS devices. It might be a small price to pay, though, for the struggling company to partner with the ubiquitous Apple.
The deal has been in the works for around a year but wasn’t made public until a few hours after Apple’s developer conference Monday in San Francisco. Investors jumped on the news — TomTom shares were up 14% late Tuesday afternoon.
Source URL: https://investorplace.com/2012/06/tomtom-signs-apple-maps-deal-tmoaf/
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