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TomTom Needs To Diversify Faster
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DennisN
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PostPosted: Mon Oct 03, 2011 12:05 am    Post subject: Reply with quote

tomtom_shareholder wrote:
DennisN wrote:
As an optional extra (but now as a Live model), it costs 540

As far as I know the TomTom Carminat LIVE system costs 500 euros (don't know how much pounds that is).

What do you know? If you're going to post articles which appear to be informative, then you should get your facts straight or people will start to question ALL your statements. I posted that price from my Renault dealership, where my van was being serviced and I had the price list in my hand. Evil or Very Mad The 540 price tag was for UK/ROI map and the Europe map was an extra 110. The current rate of exchange is 1.15 Euros to the Pound Sterling, but in the price list in my Bristol, UK dealership, the vans and accessories are priced in Sterling, not Euros! As for take up, I don't know any other whitevanman who has the ML+ model Kangoo like me - they all drive the basic models which don't come with satnav at all. Mine was special order for delivery 1st March 2010 but wasn't delivered until 1st August 2010!
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tomtom_shareholder
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PostPosted: Mon Oct 03, 2011 7:35 am    Post subject: Reply with quote

DennisN wrote:
tomtom_shareholder wrote:
DennisN wrote:
As an optional extra (but now as a Live model), it costs 540

As far as I know the TomTom Carminat LIVE system costs 500 euros (don't know how much pounds that is).

What do you know? If you're going to post articles which appear to be informative, then you should get your facts straight or people will start to question ALL your statements. I posted that price from my Renault dealership, where my van was being serviced and I had the price list in my hand. Evil or Very Mad The 540 price tag was for UK/ROI map and the Europe map was an extra 110. The current rate of exchange is 1.15 Euros to the Pound Sterling, but in the price list in my Bristol, UK dealership, the vans and accessories are priced in Sterling, not Euros! As for take up, I don't know any other whitevanman who has the ML+ model Kangoo like me - they all drive the basic models which don't come with satnav at all. Mine was special order for delivery 1st March 2010 but wasn't delivered until 1st August 2010!


UK price is now a little different. I think it's the difference between Carminat and Carminat LIVE. http://www.renault.co.uk/cars/model/meganesporttourer/pricesandspecs.aspx Carminat TomTom Live navigation system 470.00, Carminat TomTom Live Services 3 year subscription 125.00.

In Europe it's a bit cheaper. I understand you think it's pricy. All I say is that I see figures about take up which are not bad at all. Maybe with a lower price they might improve further.

Offcourse I know how many euros a pound sterling is. With "don't know how much that is" I meant to say that in this euro crisis the exchange rate is going up and down.
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peterc10
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PostPosted: Mon Oct 03, 2011 10:02 am    Post subject: Reply with quote

Rather than believing everything companies tell me, especially what they tell their shareholders (been there, done that etc.), I tend to apply some market logic of my own.

To start off with the market for new cars is different to new sat navs (or for that matter the new van Dennis was referring to). When you buy a car the cost of "extras" has a huge mark up and bears no relation to what they really cost to put in. The real profit, both for the manufacturer and the dealer, is earned on these extras. Therefore, despite the apparently high selling price, TT themselves will almost certainly make less profit on each one sold than they would with even their cheapest PND. After all I am sure that they have had to compete on a unit price basis with other PND manufacturers to get Renault's business. So this means that, to continue making the same margin, they have to sell a lot more of these than they would PNDs.

Next, when I am buying a new car why would I want to spend nearly 600 on a new Europe Sat Nav (your price was UK only) when I probably already have one, or know I can buy an equivalent one for 150 at most? Or alternatively I have an iphone or Android phone (or the equivalent pads if I want a big screen) that I know I can put equivalent software on for less than 50. Or, if I have good data plan, get Google Nav for free.

Ahh ... you say, but the car will be worth more with Sat Nav when I come to sell it. Will it? Research suggests that, at the moment, Sat Nav adds little to the value of a used car, unlike the "must have" extras like metallic paint, AC, leather and parking sensors. And who wants to buy a car with 3 year old maps I wonder? If I want to update the maps how can I do that? By having to go to my local dealer and paying through the nose for them. And again why should I pay extra when the alternatives are so much cheaper.

I think over time all this will change, with Sat Nav being offered "free" in more and more relatively cheap cars, as air conditioning has been. But that will drive the price, and probably quality, of such units down and make them just another component for car manufacturers buying departments to outsource aggressively. Again that is going to drive buying price down at the same rate as numbers increase. I am sure there are plenty of Chinese manufacturers (including those making TTs at the moment) just waiting to get in there and really cut the price. And when you are buying a car with an apparently free sat nav who is going to look at the quality or the maker?

So, put at its simplest, I am not buying TT's strategy, or their shares.
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Darren
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PostPosted: Mon Oct 03, 2011 10:14 am    Post subject: Reply with quote

Some valid points there but you overlook the map data. There are still only two map data providers. OSM, although making rapid improvement, still has a long way to go with navigable map data and there's a reason why no PND has opted for OSM mapping.

Google still don't have any usable navigable data outside of the US and even there it is derided for errors.

So, even if TomTom don't get the hardware deal, they will always have the map licensing income and with only two players, they have a large share of that licensing market.

I don't agree that TomTom will make a smaller amount per device from automotive sales but they will not sell them in anywhere near the numbers they have enjoyed for PND.

But, those who now own TomTom's in Renault cars can update in exactly the same way as you or I do, via an SD card in their computer and TomTom's plans for NAV3 are, ultimately, to make them computer independent with updates being delivered OTA.

The market has changed considerably and TomTom may well have paid over the odds for Tele Atlas, but they're still well placed and so long as they can manage the transition and keep the shareholders from revolting, they should be able to survive.

But it's that last question that is the key here. Even Nokia are struggling to keep their business afloat and shareholders aren't known for their patience.
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peterc10
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PostPosted: Mon Oct 03, 2011 11:13 am    Post subject: Reply with quote

We can agree that about the only thing of any worth in TT is the map data. But for how much longer? I would not underestimate the desire of companies like Google to change that.

Not sure what you mean about Google not having "usable navigable data", but that is certainly not my experience in the UK. I have Sygic (which uses TT's map data), but I still often switch to Google Nav or Maps, which I find is very good for what I want. Of course all of them can, on occasions, be wrong, but I can normally get around that by applying some common sense. For example Google does not show the two year old estate close to us, but then neither does the Sygic map that I only updated a week ago.

And Google search is so much better than relying upon built in POIs, which is why Sat Nav software (including the latest Sygic) is building Google search in. And the ability to switch to Satellite and Street View helps a lot when you are looking for somewhere.

We will have to agree to disagree on what TT get for each unit, because we are both guessing (unless you really do have an inside track!). And it is not something they will ever release, being commercially sensitive. But usually the mark up on these extras is truly, eye wateringly, enormous. And if I am Renault wanting to do an exclusive deal for "x" hundred thousand units over the next 5 years I am going to drive a VERY hard bargain on price.

It is interesting to note that Nissan does not appear to use TT for their Sat Nav, despite them having the same purchasing organisation. Hedging bets at Alliance level? Or reflecting that Renault is more of a European brand, whereas Nissan is more worldwide. Who knows?

And finally I don't think it is fair to blame shareholders here. After all they have seen the value of their holding collapse over the last 3 years (much more than most other companies) and in those circumstances they really do have to wonder if the same directors have got the strategy right

But only time will tell. A (crazy?) gambler might well think that, at the present share price, TT is worth the punt, just like putting your last $100 dollars on the spin of a Las Vegas roulette wheel might be. Not me. But then I didn't buy Microsoft or Apple or Intel shares 25 years ago, so what do I know?
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Darren
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PostPosted: Mon Oct 03, 2011 1:40 pm    Post subject: Reply with quote

peterc10 wrote:
Not sure what you mean about Google not having "usable navigable data", but that is certainly not my experience in the UK.

Where they use Tele Atlas data, asa they do in the rest of Europe.
Quote:
And finally I don't think it is fair to blame shareholders here. After all they have seen the value of their holding collapse over the last 3 years (much more than most other companies) and in those circumstances they really do have to wonder if the same directors have got the strategy right

I'm not blaming shareholders. I'm suggesting that they may not be happy waiting an indefinite time for Tomtom to restructure.
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peterc10
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PostPosted: Mon Oct 03, 2011 2:00 pm    Post subject: Reply with quote

Darren wrote:
peterc10 wrote:
Not sure what you mean about Google not having "usable navigable data", but that is certainly not my experience in the UK.

Where they use Tele Atlas data, asa they do in the rest of Europe.


I didn't realise that. Embarassed

So what is in it for them to (presumably) pay Tele Atlas and yet not charge the millions of us that use it? Unless it is a stop gap until they get their own data up and running, which, presumably, they could get from their Street View exercise.
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Darren
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PostPosted: Mon Oct 03, 2011 2:04 pm    Post subject: Reply with quote

peterc10 wrote:
So what is in it for them to (presumably) pay Tele Atlas and yet not charge the millions of us that use it? Unless it is a stop gap until they get their own data up and running, which, presumably, they could get from their Street View exercise.

Google get lots of data on our movements and they've said they plan to monetize it with location based ads and offers.
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peterc10
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PostPosted: Mon Oct 03, 2011 2:45 pm    Post subject: Reply with quote

Darren wrote:

Google get lots of data on our movements and they've said they plan to monetize it with location based ads and offers.

Monetize!!!!! As the Americans say, there ain't no noun that can't be verbed. Laughing
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tomtom_shareholder
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PostPosted: Mon Oct 03, 2011 3:54 pm    Post subject: Reply with quote

peterc10 wrote:
Darren wrote:
peterc10 wrote:
Not sure what you mean about Google not having "usable navigable data", but that is certainly not my experience in the UK.

Where they use Tele Atlas data, asa they do in the rest of Europe.


I didn't realise that. Embarassed

So what is in it for them to (presumably) pay Tele Atlas and yet not charge the millions of us that use it? Unless it is a stop gap until they get their own data up and running, which, presumably, they could get from their Street View exercise.


What is in it for Google to actually PAY TomTom for using their maps and offer it for free? What is in it for Google to announce their free map offerings on exactly the same date as TomTom publishes their quarterly financial results? (and shares plummeting)

My guess is that there are more than one party that try to push down tomtom shareprice and make shareholders worrysome or even revolting. Because that would eventually lead to TeleAtlas being for sale again, and Google, Samsung, Apple, RIM, HTC, Garmin would all stand in line to buy it.

Know this: the total value of tomtom (all shares) is now 600 million euro. That is pocketmoney for Google, Apple et all. Only TeleAtlas was bought for 3 billion. So the value of TeleAtlas alone is far higher than the total value of tomtom.

One could argue that maybe the value of maps might have decreased. On the other hand, they have now mapped India http://www.livemint.com/2011/08/04174400/TomTom-to-start-sales-in-India.html and also south America http://corporate.tomtom.com/releasedetail.cfm?ReleaseID=569764 Also, the maps will be the basis of location based advertising.

TomTom have a construction in place that protects them from hostile take-overs. The founders own 51% of the shares. But it looks like there is a lot of pressure on them to sell their assets. Which CEO Goddijn won't (I guess).
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peterc10
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PostPosted: Mon Oct 03, 2011 4:10 pm    Post subject: Reply with quote

tomtom_shareholder wrote:

TomTom have a construction in place that protects them from hostile take-overs. The founders own 51% of the shares. But it looks like there is a lot of pressure on them to sell their assets. Which CEO Goddijn won't (I guess).


That alone would ensure that I would never buy their shares, because it means the Directors/founders interests always take priority over the rest of the share holders. And so I can't even get some of my money back through a takeover, and I have to watch the people who may no longer be competent to run the company drive it into the ground. Err .... no thanks.
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tomtom_shareholder
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PostPosted: Mon Oct 03, 2011 4:37 pm    Post subject: Reply with quote

peterc10 wrote:
tomtom_shareholder wrote:

TomTom have a construction in place that protects them from hostile take-overs. The founders own 51% of the shares. But it looks like there is a lot of pressure on them to sell their assets. Which CEO Goddijn won't (I guess).


That alone would ensure that I would never buy their shares, because it means the Directors/founders interests always take priority over the rest of the share holders. And so I can't even get some of my money back through a takeover, and I have to watch the people who may no longer be competent to run the company drive it into the ground. Err .... no thanks.


What you say is something that takes serious consideration beforehand. IF I would find them incompetent, than there would be no reason to buy. And if a find them competent now, but would find them incompetent along the way, that is a risk. Actually to be more precise/factual it's 4 founders and a previous investor in TeleAtlas that together have a 55% share position. http://corporate.tomtom.com/structure.cfm So it's the previous TeleAtlas investor that has the ability to break down the protective construction.

On the other hand, if such protection mechanisms would NOT be in place, tomtom might not have gotten the time to exploit the value of the maps on the long run. Because shareholders can also be too impatient. Also, as owners they also have a huge interest in getting things done.
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PostPosted: Mon Oct 03, 2011 6:09 pm    Post subject: Reply with quote

tomtom_shareholder wrote:
[

Also, as owners they also have a huge interest in getting things done.

But not the independence to recognise that they may no longer be the right people to get them done. And that is the problem.
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DennisN
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PostPosted: Mon Oct 03, 2011 7:14 pm    Post subject: Reply with quote

tomtom_shareholder wrote:
UK price is now a little different. I think it's the difference between Carminat and Carminat LIVE. http://www.renault.co.uk/cars/model/meganesporttourer/pricesandspecs.aspx Carminat TomTom Live navigation system 470.00, Carminat TomTom Live Services 3 year subscription 125.00.

In Europe it's a bit cheaper. I understand you think it's pricy. All I say is that I see figures about take up which are not bad at all. Maybe with a lower price they might improve further.

Check my post again and you'll see I was referring to vans and van fleets. I hardly think the Renault Megane Sport Tourer price guide you linked to has any validity in that instance. In the Renault Kangoo Vans Price Lists, you'll find the Carminat at 450, 3 years Live services 104.17 and Europe map 90. Being vans, all the above come with an additional 20% VAT, making 540, 125 and 108 respectively. And it's not pricey, it's outrageously expensive - we whitevanmen are paid peanuts for providing our own vans, so the vast majority of us don't get the top model with all inclusive stuff like satnavs, so Carminat Live with Europe map will cost us 775 with 3 years services, compared with the latest top of the range GO1005 PND at 300 including 1 year free services and 95 for the next two years services subscriptions - and you don't lose it when you sell the van. Put those prices to a fleet vans buyer and try to guess what he decides!

Then revisit TomTom's publicity and see if it really says take up is "not bad". Take up is fantastic on vans whose specifications include Carminat, indeed take up is 100%. But mine took 5 months to deliver and in the meantime, my dealer was flogging dozens of vans without Carminats and no others with Carminats!
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PostPosted: Mon Oct 03, 2011 8:26 pm    Post subject: Reply with quote

peterc10 wrote:
tomtom_shareholder wrote:
[

Also, as owners they also have a huge interest in getting things done.

But not the independence to recognise that they may no longer be the right people to get them done. And that is the problem.


Hi Peterc,

Could you be specific in where you find that the current management might not consist of the right people to get things done. Or is that not what you are suggesting? There's a lot of ex-Psion people there http://www.engadget.com/2010/06/28/psion-veteran-charles-davies-leaves-nokia-for-tomtom/ but that shouldn't neccessarily be a wrong thing?
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