TomTom lowers guidance again as customers seek cheap, converged navigation solutions

TomTom on Monday lowered its 2011 financial outlook again as consumer interest in dedicated navigation devices dwindles. Despite beating second-quarter revenue estimates, the Dutch company cut its full-year revenue guidance to €1.23 – €1.28 billion from its previously forecasted range of between €1.43 billion and €1.48 billion. This marks the second time this year that TomTom has lowered its 2011 guidance — the company had already reduced its full-year revenue forecast this past April. TomTom made a name for itself selling sleek Personal Navigation Devices that could be mounted in any car to provide the user with voice-guided GPS navigation. Following the emergence of smartphone-based solutions over the past few years, however, dedicated navigation companies like TomTom and Garmin have not been able to recover business lost to free solutions like Google Maps and inexpensive paid mobile solutions such as those offered by CoPilot and TalaNav. TomTom does offer a series of mobile applications, but the relative high price points and the flood of competition have proven to be difficult barriers.

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