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Carmakers opting for Google Maps would have an impact on
TomTom's order flow, CFO Taco Titulaer told Dutch news agency
ANP, although that would not directly hit revenues immediately,
as it takes time for orders to translate into sales.
"Our order inflow from automotive was worth around 400 million
euros ($468 million) last year. Our revenues from automotive are
around half that number this year," Titulaer said in an
interview with ANP.
Carmaking alliance Renault, Nissan and Mitsubishi announced on
Tuesday that they would use Google's Android operating system
for dashboard entertainment and information systems in their
vehicles, in a potential blow to TomTom, which supplies digital
maps to Renault and other major car manufacturers.
TomTom shares, which dived 24 percent on news of the deal on
Tuesday, were down by a further 6.5 percent to 6.01 euros by
1015 GMT on Wednesday.
"The announcement adds to the uncertainty of the long-term case
for TomTom," ING analysts said in a note published on Wednesday.
"The key risk is that other clients could also move to Google in
the future."
Titulaer would not give an indication of the impact of Google's
deal on the future profitability of TomTom.
The Dutch company, which made its name in the beginning of the
2000s with the introduction of popular personal navigation
devices, is already facing shrinking sales as its market has
faltered in recent years with the advent of smartphones.
The company said in July that it expects sales to fall almost 10
percent this year to around 825 million euros, although it also
forecast adjusted earnings would rise 15 percent to 0.30 euros
per share this year, helped by cost cutting.
($1 = 0.8551 euros)
(Reporting by Bart Meijer; Editing by Jason Neely and Susan
Fenton)
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