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‘PND manufactures seeking new revenue drivers’

The Netherlands: Demand for personal navigation devices (PNDs) is declining as traffic and mapping functions become almost standard in cars and mobiles, forcing Garmin Ltd and Dutch rival TomTom NV to find new revenue drivers to get profits back on course, observed a report published in The Globe and Mail.
Garmin forecasted 25 percent fall in demand in the North American PND market in this year and upto 10 percent in European market. TomTom anticipated 15-20 percent fall globally, with the steepest falls in North America.
According to the report, PNDs are fast being cannibalised as Google and smartphone makers such as Nokia offer free turn-by-turn navigation. IHS expected that more than 135 million navigation-enabled smartphones to be sold this year, while such phones already in use will almost double to 269 million by 2013.
Commenting on the fall in demand of PNDs, TomTom CEO Harold Goddijn said PNDs need to recreate the “cool factor” they have lost to tablets and smartphones. 
Garmin bought Germany-based Navigon to gain more exposure to this in-dash market and boost its core automotive/mobile business, which includes PNDs and accounts for more than half its total revenue. On the other hand, beyond current deals with Renault, Fiat and Mazda, TomTom investors want to see a new major car deal to propel the unit, said Nomura analyst Stuart Jeffrey.
Eyeing other opportunities, Garmin is looking to the fitness market, tapping into demand by athletes and joggers for watches with GPS sensors. Its marine unit offers products to plot charts, find fish and hook up on marine networks, while its aviation unit offers automatic flight control and air-traffic advisory systems.
Apart from a brief flirtation with Nike about a sports watch, TomTom hasn’t diversified far from automotive navigation, and still relies heavily on its mapping database, which it bought in 2008 with the 2.9 billion euro acquisition of map supplier Tele Atlas.
Source: The Globe and Mail