USA: TomTom has signed global agreement with Apple for offering maps and related informmation. TomTom will be providing maps for Apple’s newly announced mapping service. The deal is expected to fight off declining sales of TomTom’s traditional satellite-navigation devices.
The news of the deal comes a day after Apple announced at its annual developer’s conference that it will replace Google’s GOOG -2.06% Maps business as the default navigation system on its iPhones and iPads. Apple said the service has a mode for viewing areas in three-dimensions, along with a local search service and turn-by-turn driving directions for in-car use.
Although TomTom didn’t provide more detail on the agreement, the news sent TomTom shares sharply higher and in early trading the stock was recently 14% higher.
According to analysts, 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. With direction-finding software available on smartphones and tablet computers, sales of standalone satnav devices are in long-term decline.
SNS Securities analyst Martijn den Drijver , stated that, “The deal with Apple is a boost for TomTom because of the huge installed base of Apple product users and because of the brand and all that it stands for itself: innovation, ease of use and quality.”