Shares in both TomTom and Garmin saw a slump this week as Google introduced their new Google Maps Navigation device for smartphones. Those mobile devices with the latest Android software will now be able to use the turn-by-turn directions application, negating the need for sat nav devices.
As the software debuted, both TomTom and Garmin saw prices in stock fall. Netherlands based TomTom noticed a 20per cent decrease whilst Garmin, the US based firm saw a fall of 17per cent. Google Maps Navigation, with additional speech recognition, will be a direct threat to the sat nav industry because unlike the TomTom and Garmin, it is free. And whilst iPhone users are able to obtain a TomTom application for their mobile devices, the Apple phone is still needed in the first place, at a cost of $99.99.
TomTom’s Harold Goddijn, chief executive explained that fourth quarter sale prices would continue to fall, whilst the third quarter had experienced a sale price which was lower than had been forecast. In addition he noted that the current economic climate made it near impossible to predict the upcoming holiday season’s consumer spend. “We have limited visibility of what the actual spending on the navigation category will be in the fourth quarter,” he said.
Meanwhile Google’s chief executive Eric Schmidt said that “we like the price of free and consumers like that as well.” He explained that the turn-by-turn driving application was one of the most requested pieces of software and that they would establish how to make profit from it at a later date.
