TomTom's Q1 profits fall 83% – are the good times over?

TomTom's Q1 profits fall 83%  – are the good times over?

TomTom has reported an 83% decline in net profit for the first quarter of 2008. Is this a sign of things to come for the PND market and navigation industry? Are the good times over? Have a look at the official quarterly results here. In 2007 Q1 net profits were €44 million, but you'll notice that Q1 2008 there was a significant decline to €7 million. So, what's the reason for this considerable decline in profits? We are seeing falling prices in the PND segment and stiffer competition in the market generally. I suppose we also have to consider the general backdrop of economic belt-tightening in Europe. With these factors in mind, it seems like there could be some tough times ahead. But let's not forget that PNDs are the fastest-growth product in consumer electronics, and if product prices go back up in Q2 we could see a different story ahead. It'll be interesting to see if TomTom can bounce back from this fall in Q1. And the big question is whether this will affect the acquisition of Tele Atlas… Stay tuned! So what does the next year hold for the navigation industry? Frost & Sullivan has provided us with their 2008 market update whitepaper. I've included it amongst other insightful reports, articles and whitepapers in a free portfolio. Click here to get it! TomTom is also lined up to speak at Navigation & Location Europe in Amsterdam this June. Take a look at the sessions here.

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