17 ms·

TomTom is such an interesting story in technology and finance. Went from zero to $ 10B+ between '05 - '07 [1]. Everyone you knew had one, used one, loved one. T

by wjnc 4y ago

TomTom is such an interesting story in technology and finance. Went from zero to $ 10B+ between '05 - '07 [1]. Everyone you knew had one, used one, loved one. Then the sudden boom in mobile phones and mobile internet and the financial crisis. Total crash of the stock. Pretty much subsistence without any proper profits since '09-'10. Not enough IP to get bought, a few licensing deals here and there. Always falling revenue. No profits. Pretty much a zombie corporation employing 4500 people. Perhaps I'm harsh. Reading the annual report [2]. It's a great company! High management board remuneration. Great place to work. A minister on the supervisory board. Measures CO2 and environmental impact and water usage. And still... what does it say when 4400 people generate about 2 years of salary in total market cap? And where the only positive value is free cash flow (non-GAAP). [1] https://companiesmarketcap.com/tomtom/earnings/ https://companiesmarketcap.com/tomtom/earnings/ [2] https://corporate.tomtom.com/static-files/8fd1d5d2-0ecb-47b6-97b7-9c8017df91c2 https://corporate.tomtom.com/static-files/8fd1d5d2-0ecb-47b6...

helsinkiandrew 4y ago
Wow an unbroken 13 year stretch of ever decreasing revenue: https://companiesmarketcap.com/tomtom/revenue/ https://companiesmarketcap.com/tomtom/revenue/
- scoopertrooper 4y ago
  I'd hate to be the one left holding that bag. https://companiesmarketcap.com/tomtom/marketcap/ https://companiesmarketcap.com/tomtom/marketcap/
- donthellbanme 4y ago
dtech 4y ago
They pretty much lost because free (subsidized) alternatives like Google Maps became available, pretty much the same story as Netscape. It probably didn't help that their maps were also incredibly expensive, €100-200 for western Europe in 2005 money.
- wjnc 4y ago
  Netscape disbanded as a company in 2003. Why is TomTom still here? I like the questions at the end of a company since a large market I work in (insurance / life insurance) is dwindling as well. What does that do with companies? How do they communicate? What happens when the inevitable shrinking sets in and your brain drain is faster than the way you shrink? Should you ever actively terminate a company and tranfer IP / assets?
  - lozenge 4y ago
    Transfer to who? All the people who know how to put the assets to good use... are already employed by TomTom. As long as the company provides value to shareholders and customers, why wind it down? Not everything had to be about growth, growth, growth.
    - wjnc 4y ago
      Let me be the first to say that hardcore capitalism isn't my usual purview. And that exactly the diversity of stakeholders is why I like this question. TomTom obviously offers no value to shareholders (no dividend policy, history of losses, perhaps except those searching for volatily). It's 49% owned by the directors with a 51% float. It clearly offers some value to customers since it has revenues. However, the revenues have been falling for a decade and most auto manufacturers seem able to procure these materials in-house. It has value to 4500 employees who retain gainful employment at TomTom! But the financial metric to measure value added for those employees is lacking: TomTom is worth nearly nothing. Society would be better of 'cancelling' TomTom and letting all employees go to companies with higher added value to society. They could be teachers, nurses and researchers at companies that further the technical boundary. Instead, they are working for no value at all except their salaries. It's sad. (: Hyperbole.)
      - deleted 4y ago
        [deleted]
      - usrusr 4y ago
belter 4y ago
As the owner of several TomTom devices, who tried a smartphone and google maps as an alternative, my experience is that the maps are of higher quality and the navigation recommendations better. Multiple times, when in a Taxi in a foreign country, that used the usual solution of smartphone and Google maps, managed to get on time and find a tricky destination by popping up my trusted TomTom.
- asddubs 4y ago
  yup, I still use one too. it's great, way better than google maps. But I'm guessing it's a hard pitch to get people to even try a dedicated device for something they already have in their pocket, for free.
  - andsoitis 4y ago
    "the best camera is the one that's with you” － Chase Jarvis
    - hulitu 4y ago
      Until you use it and then realise that the picture you took with it is unusable.
- tluyben2 4y ago
  Guess it depends on the location? We used it to drive through rural Canada and if we had followed any of the many wrong ways it tried to send us, we would be very dead.
  - fumeux_fume 4y ago
    I have TomTom as the built in nav for my car (2021 model). It's awful compared to Google maps and we live in a highly urbanized area so maybe it's just bad in general. Seeing the company's continual decline comports with my experience with their main product.
- daniel_iversen 4y ago
Havoc 4y ago
Yeah does seem like they're in a market where the problem is solved & there is no next harder step to progress to
kawsper 4y ago
They did try moving to mobiles, I used to have TomTom Navigator on my Symbian phone (Nokia N73), it worked quite well back then! But you needed a seperate bluetooth GPS device because my phone didn't include a GPS-receiver.
- kalleboo 4y ago
  Heck I own the TomTom Australia iPhone app, which I bought when visiting my parents who live out of mobile reception range. The maps were already much more accurate than Google when it came to rural tracks.
DonHopkins 4y ago
I worked at TomTom in Amsterdam from 2007-2009, and had a fun time and learned a lot working with some smart people at a great company that treated us well and had good leadership. But TomTom was just on the cusp of a small company turning into a big company. And the savings and loan crisis was about to cause the economy to collapse. Then TomTom got into a bidding war with Garmin over Tele Atlas. So they ended up borrowing a whole lot of money at a really bad time. Just as the iPhone was hitting the market, and Google and Apple were rolling out free maps and turn-by-turn navigation on smart phones that everybody already had. I wrote about that earlier in the discussion about Etak: https://news.ycombinator.com/item?id=13747015 https://news.ycombinator.com/item?id=13747015 DonHopkins on Feb 27, 2017 | parent | context | favorite | on: Who Needs GPS? The Story of Etak's 1985 Car Naviga... "Etak eventually became a part of TomTom, ensuring that its map data, some of which was first digitized back during the Navigator's development in 1984, would live on to this day." The story of how TomTom and not Garmin ended up owning the data originally digitized at Etak is interesting. At the time, there were only two digital map companies: Tele Atlas (from which TomTom got their map data) and Navteq (from which Garmin got their map data). From Wikipedia [1]: "On July 23, 2007, a €2 billion offer for the company by navigation system maker TomTom was accepted by the Tele Atlas board. This was then trumped by a €2.3 billion offer from United States-based rival Garmin on October 31, 2007 initiating a bidding war for Tele Atlas. TomTom responded by upping their bid to €2.9 billion, an offer which was again approved by the board of Tele Atlas. Garmin had been expected to counterbid once again: with Tele Atlas' main global rival Navteq subject to a takeover bid from Nokia, the company had stated that it did not wish both companies to fall into the hands of rivals. However, after striking a content agreement with Navteq through the year 2015, Garmin withdrew its takeover offer, clearing the way for TomTom. On December 4, 2007, TomTom shareholders approved the takeover. The European Commissioner for Competition cleared the takeover in May 2008, and it closed in June." TomTom (where I worked at the time) was shocked and dismayed that Garmin outbid them by €300 million on Tele Atlas, because while it made a lot of sense for TomTom to buy their own map data supplier, it would have been prohibitively complex and expensive for Garmin, who used Navteq data, to switch map data sources and retool their entire map data digestion, distribution and error correction pipelines. TomTom was so determined to buy Tele Atlas and keep it out of Garmin's hands, that they raised their bid by €900 million. In the meantime, Garmin renegotiated their deal with Navteq, so they didn't have to pay as much for the data, and didn't have to switch map suppliers. The stunt that Garmin pulled off was, in my opinion, an ingenious head-fake that cost TomTom an enormous amount of money, almost a billion euros, and at the same time saved Garmin a whole lot of money by enabling them to renegotiate a better deal with Navteq, who was faced with losing their major customer if they didn't lower their prices. [1] https://en.wikipedia.org/wiki/Tele_Atlas https://en.wikipedia.org/wiki/Tele_Atlas
cerol 4y ago
As a marathon runner, I know TomTom mainly for its sports watches. But I feel they've been fading away slowly. Garmin is still the champion in that area, but both must be taking a hit with all the cheap chinese knock offs. At the end of the day, you don't even need a high end sports watch unless you're a high end athlete. Reliable location tracking and good battery life is all you need, every other information can be derived thereof (avg speed, pace and distance). Only if you're into extreme activities you'll need something like a high end TomTom or Garmin (like 35+ km run in a hot day, or an Iron Man).
- zelos 4y ago
  > But I feel they've been fading away slowly. TomTom closed their sports division and made most of the staff redundant.
  - cerol 4y ago
    That explains it. I recently had to download their activity upload app, but it was nowhere to be found on their website. Eventually I found a binary somewhere on the internet and it worked, and their upload infrastructure is still running it seems. As long as I can get the activities from my 8 year old TomTom Runner to my Strava account, I'm good.
- reidjs 4y ago
  There is a luxury market among social athletes for these watches. Rolex for runners/bikers.
- nradov 4y ago
  Garmin is vulnerable to disruption by cheap Chinese competitors at the low end of the market. They're now trying to move beyond selling individual devices to build an ecosystem with multiple types of devices connected to online services. And their latest devices are starting to provide something like a little AI fitness coach on your wrist, which is valuable even to ordinary people not into extreme activities. So far the execution is a little clumsy and buggy but the potential is huge.
PascLeRasc 4y ago
What's a typical ratio of total salary to market cap? I don't have a reference of if 2x is good or not.
minhazm 4y ago
I had an iPhone 3G without a data plan and TomTom was one of the only companies that offered a navigation application that worked completely offline. If I recall correctly TomTom also provided the maps data for Apple Maps initially and perhaps still does to some degree.
- uticus 4y ago
  On iOS 14, in Maps app, the info section shows TomTom pretty obviously at the bottom
bradwood 4y ago
The blockbuster/Kodak moment is coming. Even if they try to pivot, it's a very long shot for them to get over it. Strong short on TOM2

by wjnc 4y ago

helsinkiandrew 4y ago

Wow an unbroken 13 year stretch of ever decreasing revenue: https://companiesmarketcap.com/tomtom/revenue/ https://companiesmarketcap.com/tomtom/revenue/

scoopertrooper 4y ago
I'd hate to be the one left holding that bag. https://companiesmarketcap.com/tomtom/marketcap/ https://companiesmarketcap.com/tomtom/marketcap/
donthellbanme 4y ago

dtech 4y ago

They pretty much lost because free (subsidized) alternatives like Google Maps became available, pretty much the same story as Netscape. It probably didn't help that their maps were also incredibly expensive, €100-200 for western Europe in 2005 money.

wjnc 4y ago
Netscape disbanded as a company in 2003. Why is TomTom still here? I like the questions at the end of a company since a large market I work in (insurance / life insurance) is dwindling as well. What does that do with companies? How do they communicate? What happens when the inevitable shrinking sets in and your brain drain is faster than the way you shrink? Should you ever actively terminate a company and tranfer IP / assets?
- lozenge 4y ago
  Transfer to who? All the people who know how to put the assets to good use... are already employed by TomTom. As long as the company provides value to shareholders and customers, why wind it down? Not everything had to be about growth, growth, growth.
  - wjnc 4y ago
    Let me be the first to say that hardcore capitalism isn't my usual purview. And that exactly the diversity of stakeholders is why I like this question. TomTom obviously offers no value to shareholders (no dividend policy, history of losses, perhaps except those searching for volatily). It's 49% owned by the directors with a 51% float. It clearly offers some value to customers since it has revenues. However, the revenues have been falling for a decade and most auto manufacturers seem able to procure these materials in-house. It has value to 4500 employees who retain gainful employment at TomTom! But the financial metric to measure value added for those employees is lacking: TomTom is worth nearly nothing. Society would be better of 'cancelling' TomTom and letting all employees go to companies with higher added value to society. They could be teachers, nurses and researchers at companies that further the technical boundary. Instead, they are working for no value at all except their salaries. It's sad. (: Hyperbole.)
    - deleted 4y ago
      [deleted]
    - usrusr 4y ago

belter 4y ago

As the owner of several TomTom devices, who tried a smartphone and google maps as an alternative, my experience is that the maps are of higher quality and the navigation recommendations better. Multiple times, when in a Taxi in a foreign country, that used the usual solution of smartphone and Google maps, managed to get on time and find a tricky destination by popping up my trusted TomTom.

asddubs 4y ago
yup, I still use one too. it's great, way better than google maps. But I'm guessing it's a hard pitch to get people to even try a dedicated device for something they already have in their pocket, for free.
- andsoitis 4y ago
  "the best camera is the one that's with you” － Chase Jarvis
  - hulitu 4y ago
    Until you use it and then realise that the picture you took with it is unusable.
tluyben2 4y ago
Guess it depends on the location? We used it to drive through rural Canada and if we had followed any of the many wrong ways it tried to send us, we would be very dead.
- fumeux_fume 4y ago
  I have TomTom as the built in nav for my car (2021 model). It's awful compared to Google maps and we live in a highly urbanized area so maybe it's just bad in general. Seeing the company's continual decline comports with my experience with their main product.
daniel_iversen 4y ago

Havoc 4y ago

Yeah does seem like they're in a market where the problem is solved & there is no next harder step to progress to

kawsper 4y ago

They did try moving to mobiles, I used to have TomTom Navigator on my Symbian phone (Nokia N73), it worked quite well back then! But you needed a seperate bluetooth GPS device because my phone didn't include a GPS-receiver.

kalleboo 4y ago
Heck I own the TomTom Australia iPhone app, which I bought when visiting my parents who live out of mobile reception range. The maps were already much more accurate than Google when it came to rural tracks.

DonHopkins 4y ago

I worked at TomTom in Amsterdam from 2007-2009, and had a fun time and learned a lot working with some smart people at a great company that treated us well and had good leadership. But TomTom was just on the cusp of a small company turning into a big company. And the savings and loan crisis was about to cause the economy to collapse. Then TomTom got into a bidding war with Garmin over Tele Atlas. So they ended up borrowing a whole lot of money at a really bad time. Just as the iPhone was hitting the market, and Google and Apple were rolling out free maps and turn-by-turn navigation on smart phones that everybody already had. I wrote about that earlier in the discussion about Etak: https://news.ycombinator.com/item?id=13747015 https://news.ycombinator.com/item?id=13747015 DonHopkins on Feb 27, 2017 | parent | context | favorite | on: Who Needs GPS? The Story of Etak's 1985 Car Naviga... "Etak eventually became a part of TomTom, ensuring that its map data, some of which was first digitized back during the Navigator's development in 1984, would live on to this day." The story of how TomTom and not Garmin ended up owning the data originally digitized at Etak is interesting. At the time, there were only two digital map companies: Tele Atlas (from which TomTom got their map data) and Navteq (from which Garmin got their map data). From Wikipedia [1]: "On July 23, 2007, a €2 billion offer for the company by navigation system maker TomTom was accepted by the Tele Atlas board. This was then trumped by a €2.3 billion offer from United States-based rival Garmin on October 31, 2007 initiating a bidding war for Tele Atlas. TomTom responded by upping their bid to €2.9 billion, an offer which was again approved by the board of Tele Atlas. Garmin had been expected to counterbid once again: with Tele Atlas' main global rival Navteq subject to a takeover bid from Nokia, the company had stated that it did not wish both companies to fall into the hands of rivals. However, after striking a content agreement with Navteq through the year 2015, Garmin withdrew its takeover offer, clearing the way for TomTom. On December 4, 2007, TomTom shareholders approved the takeover. The European Commissioner for Competition cleared the takeover in May 2008, and it closed in June." TomTom (where I worked at the time) was shocked and dismayed that Garmin outbid them by €300 million on Tele Atlas, because while it made a lot of sense for TomTom to buy their own map data supplier, it would have been prohibitively complex and expensive for Garmin, who used Navteq data, to switch map data sources and retool their entire map data digestion, distribution and error correction pipelines. TomTom was so determined to buy Tele Atlas and keep it out of Garmin's hands, that they raised their bid by €900 million. In the meantime, Garmin renegotiated their deal with Navteq, so they didn't have to pay as much for the data, and didn't have to switch map suppliers. The stunt that Garmin pulled off was, in my opinion, an ingenious head-fake that cost TomTom an enormous amount of money, almost a billion euros, and at the same time saved Garmin a whole lot of money by enabling them to renegotiate a better deal with Navteq, who was faced with losing their major customer if they didn't lower their prices. [1] https://en.wikipedia.org/wiki/Tele_Atlas https://en.wikipedia.org/wiki/Tele_Atlas

cerol 4y ago

As a marathon runner, I know TomTom mainly for its sports watches. But I feel they've been fading away slowly. Garmin is still the champion in that area, but both must be taking a hit with all the cheap chinese knock offs. At the end of the day, you don't even need a high end sports watch unless you're a high end athlete. Reliable location tracking and good battery life is all you need, every other information can be derived thereof (avg speed, pace and distance). Only if you're into extreme activities you'll need something like a high end TomTom or Garmin (like 35+ km run in a hot day, or an Iron Man).

zelos 4y ago
> But I feel they've been fading away slowly. TomTom closed their sports division and made most of the staff redundant.
- cerol 4y ago
  That explains it. I recently had to download their activity upload app, but it was nowhere to be found on their website. Eventually I found a binary somewhere on the internet and it worked, and their upload infrastructure is still running it seems. As long as I can get the activities from my 8 year old TomTom Runner to my Strava account, I'm good.
reidjs 4y ago
There is a luxury market among social athletes for these watches. Rolex for runners/bikers.
nradov 4y ago
Garmin is vulnerable to disruption by cheap Chinese competitors at the low end of the market. They're now trying to move beyond selling individual devices to build an ecosystem with multiple types of devices connected to online services. And their latest devices are starting to provide something like a little AI fitness coach on your wrist, which is valuable even to ordinary people not into extreme activities. So far the execution is a little clumsy and buggy but the potential is huge.

PascLeRasc 4y ago

What's a typical ratio of total salary to market cap? I don't have a reference of if 2x is good or not.

minhazm 4y ago

I had an iPhone 3G without a data plan and TomTom was one of the only companies that offered a navigation application that worked completely offline. If I recall correctly TomTom also provided the maps data for Apple Maps initially and perhaps still does to some degree.

uticus 4y ago
On iOS 14, in Maps app, the info section shows TomTom pretty obviously at the bottom

bradwood 4y ago

The blockbuster/Kodak moment is coming. Even if they try to pivot, it's a very long shot for them to get over it. Strong short on TOM2