Goddijn told Reuters that an overhaul of TomTom's digital mapping
architecture lies behind a renaissance that has seen its automotive
division win big contracts in recent months, prompting analyst
upgrades and a 40 percent surge in its shares.
He said carmakers are now betting on TomTom as one of the few
companies besides Google capable of providing location data good
enough and fast enough to meet the safety requirements for computer
assisted driving -- and ultimately, self-driving cars.
"We are seen by our customers as the guys with the right ideas on
how you do those things," he said in a interview, relishing the
company's comeback story.
A rare example of a global consumer electronics brand to come out of
Europe in the 2000s, TomTom went into a tailspin after overpaying
for digital map-maker TeleAtlas in 2008.
The market for its main product, personal navigation devices,
entered a brutal decline. Prices fell and margins were crushed as
cheaper competitors entered an increasingly saturated market for
dashboard-mounted GPS systems, and smartphone navigation apps
offered an even cheaper substitute.
![](http://archives.lincolndailynews.com/2015/May/04/images/ads/current/Matthews_construction_sda_042414.png)
With the PND market stabilizing, Goddijn thinks TomTom's other
business lines are poised for a new cycle of growth.
Analysts' enthusiasm has been fired by contract wins with carmakers,
including two with Volkswagen this year as well as deals with Fiat,
Hyundai and Kia.
DIVERSIFICATION
But TomTom's revenue base has also diversified. Its consumer product
offerings have expanded to include fitness watches and a line of 'GoPro'-style
action cameras launched this week.
It also licenses its digital maps to tech giants. One of TomTom's
few bright moments during the dark years came in 2012, when Apple,
seeking to end its reliance on Google, choose TomTom's maps to use
in its own navigation app, starting with the iPhone 6.
And finally, TomTom has been quietly building up a "telematics"
business, providing the telecommunications systems used in car fleet
management, which has become the largest of its kind in Europe's
fragmented market.
In the interview, Goddijn said the unit, which reported sales of 110
million euros ($124 million) in 2014, has the potential to grow
sales at more than 20 percent per year for the coming five years
without acquisitions.
But TomTom's mapping technology is at the core of investor demand
that has given the company a 1.8 billion euro market capitalization
despite 2014 profits of just 22.7 million euros.
The company's maps can now be redrawn on the fly, integrating
feedback from cars on the road, and then shared immediately with
other drivers.
"No one else has that," Goddijn said, flatly.
'EXCITING AND SCARY'
Cars are increasingly equipped with multiple sensors, not only GPS
positioning and mobile phone connections but radars, cameras and
driver heart-rate monitoring systems. Lidar (reflected laser
imaging) may also be added in future.
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Goddijn said the overhaul of TomTom's digital mapping architecture
"gives us a lot of confidence" this proliferation of data can be
processed in a way that ensures users' safety.
"It's exciting and it's scary, because millions of cars will come
and there's tons of data going to be produced," he said.
The biggest question mark hanging over TomTom's strategic future is
Nokia's plan, announced this month, to sell its map-making arm HERE,
which has U.S. roots. Google, TomTom and HERE are the three major
digital map-makers with the potential for use in self-driving cars.
Though TomTom has won almost all major automaker contracts renewed
in the past year, HERE still has more than 70 percent of the
automotive market.
Potential buyers include tech giants Apple and Uber, or less
realistically, Microsoft, which could have taken HERE when it bought
Nokia's smart phone operations. Google is also mentioned although it
already has its own technology.
A consortium of automakers who view Google as an undesirable rival
is also seen as a realistic possible buyer of HERE, as are private
equity buyers who could build the business up -- or wind it down.
The worst case scenario for TomTom would probably be a takeover of
HERE by navigation arch-rival Garmin Ltd.
What does Goddijn think will happen?
"That question is too complex to handle," he said. "Even if I wanted
to I couldn't give you the answers, because a lot of it depends on
who it is and how they want to handle it."
![](http://archives.lincolndailynews.com/2015/May/04/images/ads/current/mks_lda_mothers_2015.png)
He said his focus for now is on continuing TomTom's winning streak
with automakers.
"Let's face it, our market share is not where it should be. There is
an incumbent and we need to take market share away."
($1 = 0.8875 euros)
(Editing by Catherine Evans)
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