[wjnc]

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/

[2] https://corporate.tomtom.com/static-files/8fd1d5d2-0ecb-47b6...

[dtech]

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.

[alFReD-NSH]

Something that most commenters are missing is that TomTom's most revenue comes from B2B deals, which are mostly deals with automotive companies for car screens experience and also providing maps data for products like Bing Maps.

[scarface74]

And most consumers would much rather have either CarPlay or Android Auto than the crappy software that is made my the manufacturers.

[hulitu]

Android Auto is crap. It only works with Google apps and some third party media players, when it starts. I gave up on it a long time ago.

[DavidPeiffer]

This week I've been trying Android Auto out in a rental car. I'm not impressed so far. Google Maps has worked okay, but Spotify has not. I don't know where the line is between Android Auto and the Jeep Cherokee interface, but the turn by turn directions are super quiet compared to the music with seemingly no way to adjust. Squarely on the Jeep UI side, I've been using the car for 4 days and still haven't figured out how to turn the radio off but keep the screen and turn by turn directions running.

While I haven't tried it, Osmand recently added support for Open Street Maps on Android Auto. I'm hopeful the experience is decent, but not willing to pay for it at the moment.

[whazor]

TomTom is actually developing their own distribution of Android Auto. Licenced and customized to manufacturers. The design concept looked very slick.

[scarface74]

What is a “distribution” of Android Auto? Isn’t it just a remote interface for your phone?

[grvdrm]

Is that true? Not saying you are wrong but is it just an anecdote? I anecdotally know lots of people that just use their car GPS and don’t bother with CarPlay/AA

[scarface74]

80% of new cars support CarPlay

https://www.cnbc.com/2021/05/29/apple-carplay-massive-succes...

As far as I know, most cars that support CarPlay also support Android auto. I can’t imagine car manufacturers wanting to pay licensing fees to TomTom unnecessarily.

[r-w]

Which makes you wonder if there must be some good reason why they’re still doing it.

[Nullabillity]

Anecdotally, people just use phone holders. I have never seen anyone use either the built-in GPS or CarPlay/AA.

[Bud]

False. People greatly prefer CarPlay if they are iPhone users, and already people are refusing to buy any car that doesn't support it.

Phone holders are over.

Even as early as 2017, the majority of car buyers already wanted CarPlay in a new vehicle and one-quarter of buyers said it was a "must have". That was five years ago. I'm sure the numbers are much higher now.

https://www.cnbc.com/2021/05/29/apple-carplay-massive-succes....

Over 80% of new cars sold now support CarPlay. There's a reason for that: customers demanded it and walked out of dealerships if they didn't get it.

[GiorgioG]

I use my CarPlay for NAV all the time.

[perlgeek]

... and yet car makers still feel obliged to provide turn-based navigation out of the box.

[sdenton4]

But the car manufacturers have a lot more leverage for negotiating if they don't really need the software.

[prepend]

I like BMW’s nav idrive better than the CarPlay integration and use it instead of google/apple/wake.

First because it uses the whole screen and heads up display and CarPlay doesn’t. But this is probably something that could be done with better integration.

Second because CarPlay takes over the phone and I want nav to keep running while I use the phone for other things. I know that I shouldn’t, but at stop lights I’ll read texts, HN, etc. with an active nav, I have to switch away from it while I use the phone. With the car running the nav, I can use my phone for whatever I like.

All I use Apple Maps for is to send directions to my car.

It’s kind of nice to just have a dedicated nav in my car.

[scarface74]

“I don’t want to use CarPlay because if I do, I can’t be a distracted driver and do things that are illegal in many jurisdictions”

[airstrike]

You read HN at stop lights? How long are those stops???

[wjnc]

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?

[ghshephard]

Small Nit - Netscape was broken up into pieces and sold to Sun Microsystems and AOL in 1999 for $10B. Thank Mike Homer for the great timing and resolve to get out while the getting was still good.

[DonHopkins]

Selling Netscape's server group to AOL was just sadistic punishment.

[mardifoufs]

For who? Genuinely curious, I didnt even know Netscape has a server division. Was it punishment for the team working there because it broke their potential, or was it that AOL got ripped of because Netscape server tech was horrible?

Late 1990s/early 2000s acquisitions just always sound so wild to me! Insanely wasteful, or just even bizarre. Tons of old/traditional corporations trying to merge/buy their way into completely unrelated markets, oe in this case cash rich new megacorps like AOL that had immense potential just squandering insane amounts of capital with almost 0 RoI. Crazy times!

[ghshephard]

The Netscape Server products were amazing. High performing LDAP multi-master systems years ahead of its time, a calendar and email product that we used at companies years after Netscape was no more.

It was tragic that so many amazingly talented engineers ended up resting and vesting at AOL for years - but, at least they all scattered to the winds a few years after that and went to see other companies.

[prepend]

And just more of AOL being really stupid. It seemed more like corporate charity.

[TedDoesntTalk]

> since a large market I work in (insurance / life insurance) is dwindling

Out of curiosity, why is the life insurance market dwindling??

[hellisothers]

Less people with dependents (partners, kids)? Less people care or put thought into what happens after they die? Also anecdotally many/most peers I talk to about this say their company provides life insurance, I then point out the difference between this and actual term life insurance for when/if they change companies: “oh huh…”

[fennecfoxen]

Don't forget that life insurance used to come in a different form, "whole" life insurance (instead of term life insurance) which doubles as a savings/investment vehicle. This has changed a lot: people have other alternatives that are popular (401(k)s are basically everywhere), and life insurance companies are no longer able to offer the same kind of terms, especially given the ultra-low-interest-rate environment of 2008 to present.

[TedDoesntTalk]

This sounds like pure speculation, which is fine, and I appreciate your comment, but would also like to hear from the poster who made the original comment since he works in that industry.

[wjnc]

Thanks Ted. In the Netherlands it’s a combination of a few market trends. 1. A trick insurers pulled in the 90s and consumers never forgave us for (lending money in the late 90s for leveraged stock investments with massive cost loading; still ongoing litigation). 2. Mortgage rules changing making a certain type of life insurance ineligible for interest deduction (you used to be able to pay 5% interest, get that interest as income tax deductible thus returning 50+% of that interest and still get 5% interest in your deposit!) and 3. the very low interest rates making products generally less interesting.

Most insurers here have closed their books, with only a few products open for sales. A few larger insurers and hedge funds are buying portfolios in order to hopefully gain benefits of scale. There’s basically two ways of making money: better investment returns usually via more risky investments and cost savings. Since many of these products stem from 70s-90s IT modernization and cost saving is a real activity.

[throwaway2037]

Most growth in insurance is coming from developing countries at this point. They still have rapid economic and population growth.

[lozenge]

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]

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.)

[usrusr]

Plenty of people working for negative value except for their salaries and whatever wins they provide company owners in the negative sum games they engage in.

[sokoloff]

> most auto manufacturers seem able to procure these materials in-house

Most auto manufacturers go outside for nav/infotainment units from suppliers like Here, MVI, Telenav, etc.

I don’t see any impenetrable barrier that TomTom couldn’t try to compete in that market (or as a data supplier to that market).

[alFReD-NSH]

They are in that market actually with major manufactures like BMW.

[scotty79]

> Netscape disbanded as a company in 2003. Why is TomTom still here?

Because they are selling raw map data to Google, Bing and Apple (maybe?).

[alFReD-NSH]

As long as they have their B2B deals, they are gonna be around.

[colechristensen]

Free mapping existed before Google Maps.

Mapping isn't the hard part or the expensive part, the hardware is. Smartphones have GPS and when people started getting smartphones, the value of having a separate navigation devices went to zero-ish unless it's built in to your car or maybe some low power thing for wilderness exploration (or having a boat or a plane or that kind of thing)

[rickdeckard]

> Free mapping existed before Google Maps.

Not sure if free mapping really existed as an accessible (mobile) product, considering that nearly everyone had to buy the mapdata from dedicated companies (Navteq and TeleAtlas dominated the market, Navteq was later acquired by Nokia, TeleAtlas by TomTom)

In any case, free NAVIGATION didn't exist until Google Maps came along, completely disrupting the whole industry of "casual" Navigation solutions. Hardware wasn't even the issue, companies worked out profitable compact hardware solutions, introduced different tiers from Entry to Premium and in parallel TomTom (and Wayfinder et al) started to offer Navigation as a subscription service directly and as white-label via mobile carriers, with applications for J2ME, Windows PPC, Series60 (Nokia, Samsung,..), Symbian UIQ (Sony, Motorola). They had a robust offering, quality maps and plenty of added datasets like POI, speed-information, radar-warning,... (anyone remembers the celebrity voice packages?)

Then Google opened Navigation as public beta, grabbed a huge chunk of this market and later added offline maps to grab another chunk of it (for navigation in international roaming). The quality was far below any competitor, but it was free and for occasional use totally sufficient...

[faeriechangling]

> In any case, free NAVIGATION didn't exist until Google Maps came along

Map quest was around and popular. Google maps was better for many reasons but it really was an evolutionary product.

[prepend]

> Free mapping existed before Google Maps.

Search existed before Google as well. Free maps were very inferior to Google maps and also were a loss leader for other service that’s MapQuest was trying to sell into enterprise and stuff.

Google maps was just another ad stream for Google and so was much easier to link to, embed everywhere. And had an innovative UI.

Before Google cranked up their prices Google maps got embedded everywhere. This was novel and not something that Mapquest and other existing maps promoted.

[DonHopkins]

Yeah: Microsoft Maps on PocketPC. Pffffft!

[helsinkiandrew]

Wow an unbroken 13 year stretch of ever decreasing revenue:

https://companiesmarketcap.com/tomtom/revenue/

[scoopertrooper]

I'd hate to be the one left holding that bag.

https://companiesmarketcap.com/tomtom/marketcap/

[cerol]

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).

[reidjs]

There is a luxury market among social athletes for these watches. Rolex for runners/bikers.

[zelos]

> But I feel they've been fading away slowly.

TomTom closed their sports division and made most of the staff redundant.

[cerol]

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.

[nradov]

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.

[m463]

I've wondered if garmin is vulnerable to the apple watch.

That said, I love my garmin watch - it's and offline device that is useful without selling all your data.

[belter]

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.

[snarf21]

Navigation is all about the DATA. If it worked better (or worse) in a certain location, it is solely because they have access to quality data. Quality data costs a lot. Companies like NavTech used to literally drive cars down the road (think Google street view cards) and capturing everything (speed limit, number of lanes, boundaries, etc.) but they were bought by Nokia a long time ago. Not sure what is what these days. You can get pretty good data these days by leveraging free government data and things like OpenStreetMap. Routing is quite simple with good data. The harder part is conversion to narrative directions. How many times have you been given instructions to "continue to stay on XX for 500 feet" only to be told to "stay straight to continue on XX"? (Source: Worked for MapQuest for many years)

[drno123]

The main competitor to NavTech was TeleAtlas, that was acquired by TomTom.

[maxerickson]

Nokia's map group spun out into Here, which is owned by a group of EU automakers.

[daniel_iversen]

I really liked how TomTom's voice navigation was a lot more "vocal"/directive than Google, and for me that was a real benefit (maybe its niche, but they were at least differentiated there) but then some years ago (when they changed to a subscription service AFAIR) they changed the software and it was no longer "easier" to navigate with than Google (who had lots of other benefits incl. being free). Wonder if they have some sort of niche benefits as a navigation device now? Offline maps was good but Google's had that for a long time too.. Also, isn't Google and Apple Maps location tracking much more accurate in cities than TomTom devices because they don't just use GPS but also use cell tower triangulation as well as nearby wifi hotspot detection? And do people know (from their annual report) how much revenue comes from devices vs. licensing maps? (I'm sure device sales are close to non-existent compared to licensing deals)

[TedDoesntTalk]

> they don't just use GPS but also use cell tower triangulation as well as nearby wifi hotspot detection?

Presumably the TomTom phone apps do the same. Yes, they have phone apps not just stand alone devices.

[tluyben2]

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]

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.

[asddubs]

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]

"the best camera is the one that's with you” － Chase Jarvis

[hulitu]

Until you use it and then realise that the picture you took with it is unusable.

[mistrial9]

> is that the maps are of higher quality and the navigation recommendations better.

to be clear here, for all readers.. you mean TomTom maps are higher quality? in what region? rural, urban or ? thx

[gadders]

I won't buy another TomTom device, but I pay the ~£20/yearly fee for the mobile phone version because the maps are so much better than Google Maps and don't need an always-on data connection.

[hef19898]

The free TomTom android app is great! Cannot recommend enough.

[minhazm]

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]

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

[DonHopkins]

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

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

[kawsper]

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]

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.

[Havoc]

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

[PascLeRasc]

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

[bradwood]

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