Announced in March 2006, TomTom HOME was shipped with all TomTom devices since last spring. Considering TomTom sold between four and five million devices since that moment, this is a good subscription rate. With forecast of 7 to 8 million units to be shipped in 2007, TomTom could easily bring an additional 1.5 to 2 million TomTom Home users within the year.
"The success of TomTom HOME underscores the aftermarket potential for maps, content and services," said Harold Goddijn, CEO of TomTom who particularly highlighted this point during the 2006 financial earnings conference call with analysts a few weeks ago.
While margins are getting lower due to the general commoditization of satellite navigation products, aftermarket sales generated by customer relationship management tools and applications such as TomTom Home are increasingly important to PNDs manufacturers to generate profits. Indeed, margins on such aftermarket sales are very high: over 50%, sometimes 75% on brand accessories. Furthermore, this kind of application is also a good tool for brand exposure and brand stickiness.