TomTom Slashes Income Forecast In Consequence Of Drop In Wearables
TomTom, the Dutch digital mapping firm, lowered its sales expectations of whole year. It did this after reporting less-than-anticipated hardware income owing to unsatisfactory sales of sports product.
TomTom claimed that it was evaluating options for its Sports venture that trades wearable devices that can be wore on wrist for fitness and sports activities. The Sports venture contributed for almost 1/10th of sales in 2017. The firm did not offer details on what choice it was bearing in mind for the division.
TomTom claimed that it now anticipated yearly income to come in at the lower end of its original target range of 925 Million Euros to 950 Million Euros ($1.07 Billion to $1.10 Billion). TomTom stated that its adjusted overall profit in the quarter three dropped to 21.0 Million Euros by 10% with a dip in trades of user goods such as sportswear and portable navigation devices (PNDs). These goods were partly offset by enlargement in other services, such as fleet management and automotives.
TomTom is gambling on services with higher margin, such as fleet management systems, the sale of software and maps to car manufactures, and technology for self-driving cars. This is done since the reputation of PNDs dropped rapidly in last few years. PNDs, rolled out by TomTom 15 Years back, still contribute to around 50% of its incomes. TomTom fixed an agreement with Baidu, the Chinese Internet firm, for the designing of high quality maps for self-driving cars. Experts claimed that it was a significant step in TomTom’s competition against HERE, the digital map maker.
The Amsterdam-based firm claimed that it anticipated the mutual income of the licensing, automotive, and telematics businesses to produce almost 15% more this year as compared to last year. User sales dropped to 126.3 Million Euros by 20% while whole quarterly incomes dropped to 253.4 Million Euros by 4% in the same quarter.