TomTom Profit Warning - Weaker Q1 Than Expected
The sky isn't falling, but it is confirmation that the GPS wars have been boiling for some time with some dire consequences. Stiff competition drove TomTom to drop prices, apparently leading to lower margins than they expected, both in the US and in Europe. Moving units on deal in a tough economy appears to be the issue as the big guys battle to keep market share when other makers like Mio and Navigon come into the market discounting to gain market share.
TomTom said yesterday that they expect 2.0 billion Euros for the year instead of 2.2 billion Euros. The big news is that sales in the first quarter will be around 270-280 million Euros, less than the 296 million Euro it reported in the same quarter a year ago. With the sales and the slow movement, TomTom indicated that operating margins will be in the "low single digits," down from double digits it normally reports.
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Posted by Scott Martin at April 8, 2008 6:38 AM