TomTom Earnings Off
TomTom reported earnings for the first quarter of 2008, and it was not as good a quarter this year due to significant price pressure on the well known GPS maker. So, apparently TomTom didn't grow revenue this past quarter like they have in the past. Tough competition and the tough economy has to be impacting sales of consumer electronics like this, with discretionary spending under pressure. I guess if you can't afford a tank of gas, let alone a new widescreen GPS.
Overall revenue was 264M Euros vs. 296M Euros last year, while US revenue was up 133% to 85 Million Euros.
"Retailers in Europe slashed personal navigation device inventory during the first quarter," said Dresdner Kleinwort analyst Ulrich Rathe, "leading to a massive 30% decline in sales in that geography." For the company as a whole, sales fell 10.8% in the first quarter.
TomTom's average retail price was down 42.6% to about $185, from $324 a year earlier. A quick check back in my archives had the TomTom ONE selling for $290 in March 2007, while it is frequently seen for $139 - $149 these days, and the TomTom GO 910 was at $439, while the TomTom GO 920 is selling in the mid-to upper $300's today. The price drops are dramatic, and the effect is that the big guys aren't making as much money, but they are keeping the low cost competition at bay as they are having a tough time achieving critical mass.
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Posted by Scott Martin at April 23, 2008 7:30 PM