TomTom Mobile: no App, LBS platform instead

Three months after announcing off-board solution, TomTom shifts strategy

TomTom Mobile: no App, LBS platform instead
TomTom’s CEO Harold Goddijn, speaking today at the Fourth quarter conference call earnings with analysts, once again clarified the strategy of its company towards the mobile industry. While three months ago the Dutch company intended to sell off-board navigation, now the focus seems to be on LBS platform.

“If you look at our business strategy in mobile”, he said,” I don’t think we should aim to develops tens of small applications, with different phones, different form factors, different operating systems and different functions. That is an awful of complexities to deal with. I don’t think it would be a good strategy for us to try to do everything ourselves and build large engineering teams to do specific applications for very specific phones or network operators.

However, our strategy is based on the idea of making it simple for networks operators, handsets manufacturers and systems integrators to use Tele Atlas maps in their mobile applications and that involves not only the content but it also involves technology to be able to deploy that content in a very cost effective way that shortens the time to market and the cost of developing these applications.

So what you will see coming out of Tele Atlas-TomTom is a set of tools and platforms to make it easy and fast to deploy location-based services in a variety of applications and contexts. That platform of development, you can see some of that if you go to our website and see our route planner. That is a branded expression of those platform tools, but you can expect further development in that space. We will make that type of development available in a white label to a wide variety of customers in the mobile space for them to develop specific applications.

With such a clarification of TomTom strategy in the mobile space there is a clear shift from what was stated a quarter ago by Harold Goddijn: the development of an off-board navigation system. The exact quote from the October 28, 2008 earning calls is the following: “We are intensifying our development efforts in the mobile space both with on-board and off-board solutions. We are targeting handset manufacturers and network operators as well as everyone that would like to license under their own label. This is an activity we started a couple of months ago. We expect to go to market with first product in the first part of 2009 with a first off-board product I should say, because on-board products we are still shipping successfully.”

With this new strategy TomTom expects to play in the LBS platform arena where Google, Microsoft, deCarta, Autodesk and others have been offering their solutions for years. TomTom is coming late to this market and trying to bundle these services with home-made content (Tele Atlas map data, HD traffic) is perhaps not the best way to succeed.

At the end of the day it seems TomTom decided to reduce its ambitions in the mobile space due to the high debt occurred by the acquisition of Tele Atlas. It is likely that the engineers supposed to develop this off-board navigation have been part of the job cuts announced a few weeks ago.

Tuesday, February 24th 2009

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