Cain Velasquez schreef op 24 november 2014 00:30:
Apple Needs to Buy TomTom Now
by rlanctot23-11-2014
It’s the fourth quarter of the year and time, again, to consider the possibility of an acquisition of TomTom by Apple. This annual Q4 speculation was missing, for the first time, last year, but much has changed in the past 12 months.
Apple’s strong interest in mapping is manifest in the roster of map-related acquisitions over the years including: Placebase, C3 Technologies, Locationary, Hopstop.com, Embark, and Broadmap. The most significant change since 2013, though, has been the announcement of Apple CarPlay for the integration of iPhones in cars.
Last week’s L.A. Auto Show revealed that CarPlay, in spite of its March debut at the Geneva Auto Show, is still not ready for the market. As noted in an Automotive News blog, the best auto makers can hope for is spring 2015 availability – and likely requiring some sort of dealer update for the high profile vehicles, such as Volvo’s XC90, for which it was originally intended. (http://tinyurl.com/lr3xegl - Apple’s CarPlay Goes Missing in L.A. and in the Showroom)
TomTom has had its own struggles in the automotive market with troubled hardware-centric programs in Europe, most notably Fiat’s Blue&Me Mobile which never made it to the U.S. Perhaps taking a lesson from its mixed experience as a Tier 1 supplier, TomTom’s latest quarterly report shows the company shifting its emphasis toward selling maps, software, traffic and cloud services – not hardware.
The company touted automotive orders of EUR170M, but then had to backtrack a bit during the Q&A session with financial analysts noting that the revenue consisted of map data and updates, software and services to be recognized over an extended period of time. In other words, impressive though the figure was it did not suggest that TomTom was out of the turnaround woods.
Apple, on the other hand, has demonstrated nearly unmatched skill in delivering market-beating hardware solutions along with productive and proven cloud services, navigation and streaming audio applications. But automotive integration has so far eluded Apple.
TomTom’s maps have put Apple into the navigation business and Apple’s probe data has contributed greatly to the enhancement of TomTom’s already strong traffic information services. (Note: Neither TomTom nor Apple will confirm that TomTom has the benefit of Apple handset probe data.)
By working together, Apple has helped TomTom compete with its nemesis, HERE, in traffic services – but TomTom remains at a disadvantage in terms of map quality. As evidence, BMW North America replaced TomTom’s U.S. maps in favor of HERE within the past year. Audi AG shifted its European traffic service business from INRIX to TomTom.
Both HERE and TomTom claim 80% market share, but HERE is likely referring to map data share for embedded in-car systems while TomTom is referring to traffic information. A closer cooperation – ie. ownership based – between Apple and TomTom will enable coordinated improvement of map data for mobile navigation and advertising.
Collaboration between TomTom and Apple will allow Apple to gain a leg up on autonomous driving developments (where TomTom claims partnerships with Volkswagen and Bosch) while TomTom will gain access to indoor navigation technology from Apple. Both companies, in other words, will be able to fill the gaps in their location product offerings.
The argument against an acquisition is that Apple is getting the milk (maps) without owning the cow. But TomTom’s ongoing revenue decline threatens investments in research and map data quality along with its work in traffic and the extension of its product line into wearables.
There are more details to the rationale, but let’s ring in the holidays with a restoration of the annual Apple buying TomTom rumor. With more than $100B in cash held overseas, the acquisition of TomTom makes huge sense. The only barrier is likely to be TomTom greed.
blogs.strategyanalytics.com/AMCS/post...