TomTom is unloading its telematics division to the tune of €910 million. The lucky buyer is the automotive main-stay, Bridgestone Europe. Have you ever wondered how companies keep an eye on their fleet of lorries? Telematics is the key, and it also provides information for the autonomous future's driving.
The idea of getting rid of its telematics division came a few months ago, as TomTom made a push to compete with Google in navigation software. It was confirmed by TomTom then that the Dutch company was putting the telematics division under review, with analysts valuing the business at round about €700 million. The final sale price is a great deal higher than the original estimate.
TomTom vs. Google Maps
TomTom previously denied that this sale is about going up against Google Maps, but, in all likelihood, trying to compete with Google plays a role. In Sepetember 2018, Google put together a deal with major car manufacturers like Renault, Nissan and Mitsubishi to promote Android – which includes services like Google Maps – with Here acquiring a few German carmakers to help power their onboard navigation systems.
Google On Top Again
Google's Maps app becoming more and more the navigator-of-choice has really impacted TomTom's business. TomTom has also never fully recovered from the smartphone revolution. 2007 saw the peak price of TomTom stock at $65 per share, with the company's value dropping to a pultry $3 in two years. This is the period when Apple and Google launched their iOS and Android ecosystems.
In 2017, TomTom saw some layoffs as they shifted away from consumer wearables. All of this brings us up to the present sale of the telematics division, with TomTom refocusing on its mapping and navigation business. According to a press release reported by venturebeat.com, the sale will help TomTom to become more focused and agile as a company, shaping the future of driving with highly accurate maps, navigation software and real-time traffic information and services.
Free Map And Traffic SDK
At the end of last year, TomTom launched a free map and traffic SDK for mobile developers, part of their strategy against Google. TomTom hoped to capitalise on changes Google made to their Maps API, that frustrated some in the developer community, where it was argued that developers would end up paying too much. Here Technologies also launched a new freemium plan for developers around the same time.
TomTom CEO Harold Goddijn had this to say: “After a thorough review of strategic options, we have determined that the sale of Telematics to Bridgestone is in the best interest of both Telematics and our core location technology business. We will continue to invest in our innovative map-making system, enabling faster map updates while lowering operational costs, paving the road toward autonomous driving.”
€750 million of the €910 million will be given back to shareholders, with the sale being closed by the end of the 2nd quarter, 2019.