If you remember TomTom as the GPS system your parents used on car trips, I have two pieces of news for you. The first is that you’re not as young as you think. The second is that the company is more popular than ever, even if it looks like nobody is really talking about it.
Even if you’ve never used a TomTom device, you’ve likely benefited from its technology somehow. Let’s explore what the company has become and how it’s doing today.
The Flagship GPS Brand of Its Time
TomTom started operations in 1991 as a Dutch company that developed software for portable business devices. However, its popularity took off in 2004 with the launch of the TomTom Go. This GPS system marked a milestone in car navigation. Users could attach it to the windshield with a suction cup and forget about physical maps.
In 2008, the company acquired Tele Atlas, one of the largest producers of digital maps at the time, for about $3.2 billion. TomTom was no longer just a software company but a manufacturer that produced its maps.
The GPS in many cars that had it as an option came from TomTom.
That first decade, from 2000 to 2010, was productive for TomTom. Its results from Q1 in 2010 showed a clear trend: Consumer products accounted for almost 70% of revenues. On the other hand, licensing and agreements with car manufacturers represented less than 30% of earnings.
Adapting to the Times
In 2012, TomTom set out to create a global map covering almost every road. It recorded everything using vehicles equipped with GPS, a 360-degree camera, a LIDAR scanner, and a computer.
The initially daunting task became easier as the company received anonymous data from vehicles that sent their GPS positions. Google Maps and Apple Maps use the same method to communicate the status of traffic real-time, road conditions, and so on.
2012 is a crucial year in the company’s history. That was when TomTom became the map data provider for Apple Maps on iOS 6. Apple wanted a rival with some pedigree to Google Maps, which Google launched as a desktop version in 2005 and as a mobile app in 2008.
The deal ended in 2020 when Apple completely controlled its mapping service. By doing so, the company finally made Apple Maps a real competitor to Google Maps.
An Important Role in the Automotive Industry
Since then, one of TomTom’s strategies has been to forge ever-stronger partnerships. Its maps have helped Huawei develop Petal Maps, one of the best alternatives to Google Maps and Apple Maps. The company is also responsible for providing maps in Renault’s R-Link system. Lexus, Toyota, Subaru, Fiat, and even Volkswagen have used TomTom maps.
The company will also play an essential role in the future of autonomous driving. It will develop maps specifically for vehicles using Level 1 and Level 2 technology.
In addition, TomTom partnered with East View Geospatial two months ago to provide global mapping data to the Australian Defence Force. It’s also responsible for the app used by drivers of ride-hailing service Bolt, which uses it for rides and food delivery. Bolt drivers don’t use Google Maps.
The company also has its own app, first launched in 2015 under the name TomTom Go Navigation. This one still works on iOS and Android, although the annual subscription costs $19.99. The second app is TomTom AmiGO, a version with an even friendlier interface focused on real-time alerts about fixed and mobile radars, average speed on sections of the road with radars, traffic status, and more.
Both of TomTom’s apps account for just under 30 million downloads on iOS and Android combined. In comparison, Google Maps, pre-installed on Android, has more than 1 billion downloads. Waze has 500 million downloads and Maps.me has more than 50 million. And we’re only talking about Android.
Although TomTom doesn’t directly compete with the most popular apps, it’s doing well. Consumer products no longer account for the lion’s share of its revenues: The company depends on its agreements with car manufacturers. In the last quarter of 2023, it had a profit growth of 3% compared to the previous year. In the last 10 years, it has increased its revenues by a factor of 10.
TomTom continues to sell GPS devices, but this consumer segment is declining in revenue and gradually losing its remaining power.
Images | TomTom
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