TomTom banks on partnerships to help drivers escape traffic jams


  • TECH
  • Tuesday, 07 Mar 2017

FILE PHOTO - A TomTom navigation device is seen in this photo illustration taken in Amsterdam February 28, 2012. REUTERS/Robin van Lonkhuysen/United Photos/File Photo GLOBAL BUSINESS WEEK AHEAD PACKAGE - SEARCH 'BUSINESS WEEK AHEAD 6 FEB' FOR ALL IMAGES

TomTom NV wants to build more partnerships with infrastructure companies and cities as it carves out its role in a future where autonomous vehicles reduce consumer demand for satellite navigation devices. 

The Amsterdam-based mapping company is already working on traffic management systems with engineering giant Siemens AG, roadworks monitoring company Elgin and transport planning specialist PTV AG, and is seeking more such tie-ups, chief executive officer Harold Goddijn said in an interview. 

“We don’t control the whole value chain, we don’t do traffic lights, we don’t do big traffic control centres, but we have a lot of smart technology,” Goddijn said. 

TomTom and its peers have come into increasing focus as the automotive industry races to build autonomous vehicles. With carmakers wary about leaning on tech behemoths such as Alphabet Inc’s Google, they have instead turned to others to supply the mapping data essential to developing so-called self-driving cars. In 2015 Nokia Oyj sold its HERE mapping business to a consortium consisting of Volkswagen AG, BMW AG and Daimler AG for €2.6bil (RM12.24bil). 

Alternative revenue 

Traffic management systems could become an attractive source of revenue. While at present they are used by cities to manage congestion by controlling traffic lights and other hardware to try to prevent blockages, the advent of autonomous driving means that centralised, cloud-based infrastructure management may play a greater role.  

TomTom currently supplies that technology to places such as Berlin, Zurich and Amsterdam in many cases free of charge, which provides insight to local transport authorities. In return, the cities supply TomTom with traffic data it can use to improve its products, which it licenses to technology companies including Apple Inc and Uber Technologies Inc.  

Goddijn said TomTom gets data from half a billion sources each day. 

“Uber is very much relying on our technology and our data for routing, for traffic information,” Goddijn said. “We have a vast amount of data and experience, which helps them to tune their algorithms.” 

Cash, headcount 

TomTom doesn’t have the cash riches of other companies to pile into its mapping efforts. It had €144mil (RM677.92mil) in cash and equivalents at the end of December. In contrast, chief rival in the satnav sector Garmin Ltd had US$2.3bil (RM10.22bil), Google had US$92bil (RM409.12bil) and Apple had US$246bil (RM1.09tril). Apple last year opened an office in Hyderabad, India to focus on mapping, creating as many as 4,000 jobs in the city. TomTom’s total headcount is 4,700, including 3,100 in R&D roles. 

TomTom is not alone in identifying traffic management as a growth opportunity. Panasonic Corp has started testing its technology in Denver. Even as TomTom shifts away from selling the satellite navigation gear on which it has built its business, and moves toward data, software and services, it still generates half of its revenue from hardware. 

Goddijn is one of the co-founders and biggest shareholders of TomTom and said he has no desire to sell up. TomTom’s four founders jointly own some 45% of the company.  

TomTom shares trade at around €8 (RM37.66), and are still valued well below its all-time high closing price of €53.56 (RM252.15), reached in November 2007. It hopes to gain shareholder appreciation with its recently outlined strategy goals of growing its business to business enterprise at around a 15% compound annual rate between 2016 and 2020. 

TomTom’s founders, including its current CEO, 25 years later are still the biggest shareholders, jointly owning some 45%. 

“Really, I am here to run the show, and run this company as well as I can,” Goddijn said. “That’s my duty and eventually that will hopefully translate in a higher share price.” — Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

Next In Tech News

This connected mattress automatically corrects your posture while you sleep
And now, a reading from an email according to St. Paul
Mobile services in Russia suffer outages as police disperse anti-Kremlin protesters - monitoring site
TikTok under fire in Italy after girl’s death linked to challenge
Tesla’s Autopilot won’t achieve full autonomy, Waymo CEO says
Tablets: Who still needs them? Experts describe the ideal tablet user
Piano wire or poison? ‘Hitman 3’ is some of the darkest fun in gaming
Yes, Bernie Sanders is laughing at those viral inauguration memes too
Windows + D: The fastest way to see your desktop behind open windows
Vacuum robots are a dream come true, but they can’t work miracles

Stories You'll Enjoy