I might be slightly biased (considered my nickname) but I think you are very right.

First of all, it would be technically challenging trying to seperate teleatlas from tomtom. For instance, with 'mapshare', tomtom drivers can share route changes which are then checked and actively changed within the maps. This is a costsaving way to keep maps updated, and keeps mapquality up.

Also, TomTom is now more about content and services, rather than devices. They now bring navigation to a sportswatch, PND, smartphone and built in-dash in cars from brands like Renault, Fiat, Mazda and Toyota. So the actual device doesn't really matter. That's more like a piece of plastic. It's all about mapquality and the best live traffic information.

A few years ago, Nokia was much feared. Because people tended to look at tomtom like a manufacturer of specific devices (PND's). This is changing. One exemple is the fact that they now licence their maps to HTC, who uses their maps in their smartphone models. They also licence maps to other car manufacturers like those mentioned above, who don't use tomtom for in-dash equipment. So those are map-only deals.

I also heard CEO Goddijn say to financial analysts that they are now answering RFP's (requests for proposal) for some car manufacturers, who want to go beyond a map-only deal, and might shift to in-dash navi systems as well. He couldn't be specific though, because it's just in an RFP stage, so it's not sure if new deals will be signed.

All in all there are different ways to find revenue streams for TomTom. Also I'm confident with the refinancing. They bought TeleAtlas for almost 3 billion, and debt is down to 400 million. That's a considerable delevarage in just a few years.

Don't you find rumours in the context of financial wheeler-dealering usually have some meaning? No idea about what could be happening, but it could be suggested that mapping needs more investment to get it uptodate than Tomtom are prepared to admit. The last thing you tell lenders is how desperate you are for money as the interest rates then go up, or potential buyers reduce their offers.

Mike R [aka Wyvern46]
Go 530T - unsupported
Go550 Live [not renewed]
Kia In-dash Tomtom

@Dennis: I can’t answer your mapshare question, because I don’t know much about it technically. You can ask at the forum on tomtom.com. It’s moderated by tomtom people, so they should know.

@Andy_P. I understand your comment that TomTom is still much about a piece of plastic with TomTom written on it. They won’t change overnight. That would be risky, since 60% of their revenue is still PND. Also, they don’t want to give away any PND marketshare to Garmin. Also, if you own a PND in your car, it makes sense to regard TomTom as being a PND manufacturer.

Let me explain a little about myself. The question was whether or not TeleAtlas (aka TomTom maps) is for sale. I look at this question from a small shareholder point of view. I’m a marketing and strategy consultant who recently decided to buy some TomTom shares and hope to make some money with it. Since then I try to read a lot about the satnav business to check if I made a right decision.

I look at tomtom from a strategy perspective. The first question I asked myself is why TomTom paid so much money for an overpriced TeleAtlas. I think that in 2007 TomTom already feared they would become a one trick pony. If revenue models would change to so-called ‘razorblade models’ (where you pay a small price for the device and pay for live services and map renewals afterwards), then TomTom would only be the razor and not the blade. Especially when smartphone market would grow.

So TomTom was eager to buy teleatlas and got themselves in a huge debt, just before the financial crisis. This got them into near bankruptcy. Not because sales went down: cashflow was always good and TomTom was a popular brand. But because some banks tried to pull themselves out of a banking agreement. Now almost four years later, they repayed most of the debt, and are back on ‘sure footing’, as mentioned above in the article.

I read some reports from TomToms management and listened to them talking to financial analysts. This gave me some insight about how these people think. Since then the takeover of TeleAtlas to me looks more like a ‘reverse takeover’. Like TeleAtlas took over TomTom. The maps, content and services are in the centre, and devices are more like ‘channels’ to sell them. Just like smartphones, watches or cars can be channels.

For instance, CEO Goddijn told to shareholders that they worked very hard to get good maps of India. And now that they have confidence about the maps, they want to settle in India and explore that market. So that strengthens my idea that it is maps first, devices second.

@M8TJT Off course it is technically possible to seperate teleatlas from tomtom. It might take some time because you have to seperate something that you previously integrated. But I think you can’t easily seperate TeleAtlas from the minds of TomTom management, and future businessmodels.

TeleAtlas also has a lot of relations in the car industry. TomTom tries to strengthen these relations because they want to create in-dash navi systems. So that’s another reason for them to keep TeleAtlas, they need their network.

So I don’t believe in selling TeleAtlas. I would find it less difficult to think the other way around. Garmin is a real PND manufacturer. They have their own production plants, produce their own devices, but they don’t own any maps. TomTom doesn’t own any plants: all production is outsourced, but they do own maps. So they are complementary. A merge or collaboration between these two would be the most fertile. It would save them both a lot of money.

The only problem is that I think they don’t like each other. Garmin also did a bid on TeleAtlas, and that’s where TomTom raised their bid, which got them into financial troubles. But if you look at it rationally, it would be a good case for both of them to work together in some form.

Realy informative post. Thank you

If TT really want to get into the areas you suggest then, in my opinion, they are going about it in a cack-handed way.

If they want to get into "services" they have got to become more service orientated. Their so called "support" was appalling whenever I tried to use it, and was one of the reasons I abandoned their products (the other to follow). I knew more about their products than the person I was emailing! And from what I read on this forum it ain't got a lot better since.

And if they are not concentrating on "black boxes" and are trying to get into the mobile market how come they totally abandoned the Windows Mobile platform 3 years ago, and have never even bothered with the fastest growing platform, Android? So that is my last 2 phones. And I am not alone I suspect.

An interesting decision to invest in them, but not one I would have made, as you may have gathered. Of course only time will tell whether it was the right or wrong one.

Peter
HTC Sensation
Sygic GPS for Europe (No more TT "support"!)
Copilot for USA
Bury CC9060 bluetooth car kit & Brodit mount