Full FeedGPS showdown: Garmin, TomTom square off
GPS device makers TomTom and Garmin have had to endure a long and drawn out rivalry, however there is an additional company that could give both Garmin and TomTom a cause to be alarmed. Nokia Corp. has also been working to establish themselves within the GPS market. However, certain new developments have paved the way for TomTom to potentially put an end to these rivalries once and for all.
Garmin had proposed a buy-out of $3.3 billion for Dutch mapmaking company Tele Atlas NV. Recently, they withdrew their bid. Officials explained that the bid was an attempt to keep its two major rivals, Nokia Corp. and TomTom, from gaining control of the two major map and globe rivals, which featured the Tele Atlas NV company as well as Navteq Corp.
The withdraw on the part of Garmin clears the way for TomTom to enter the picture and negotiate with Tele Atlas NV. Previously, TomTom had offered more than $2 billion for the Dutch company, which led to the higher offer of $3.3 billion from Garmin, which they ultimately determined was a price that they could not follow through on.
Meanwhile, Navteq Corp. has formed a relationship with the Garmin. This relationship stands to secure maps for all of new Garmin devices through the year 2015.
While Garmin may have found a way to ensure they are not eliminated any time soon, Garmin has only been able to negotiate a partnership with Navteq Corp., which would end potentially in 2015, while TomTom is situated in a position to completely buy out Tele Atlas NV. Future events will help to determine how much damage the takeover of Tele Atlas NV by TomTom could cause. Until then, Garmin seems content to focus on their relationship with Navteq Corp.
Via [CE Daily News]
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Hate to tell you, but you’re factually wrong, and really late with this news. Garmin counterbid, and TomTom bid a second time. After the second TT bid, Garmin withdrew. Garmin did not withdraw until the second TT offer. Your article makes it sound like GRMN just up and left. That’s not even close.
And oh ya, you’re a couple of weeks late.
on December 1, 2007 at 08:12 AM - LINKWow…another blog that totally missed the point. Garmin forced TomTom into paying way too much for a bad company. TT doesn’t have the cash for this purchase, so they’ll be borrowing a ton of cash and pass the payments on to their customers in higher prices. In the meantime, Garmin uses their 4-5 billion in cash for R&D and possibly creating their own maps. Garmin wins…BIG!
on December 1, 2007 at 08:56 AM - LINKThis report is old news, misses the point and implies that TomTom has put itself in the best position to compete. In fact, TomTom has overpaid for a money-losing mapmaker and is currently under review by the EU for issues of monopoly in Europe. Even if Nokia busts onto the scene with gps phones right away and for low cost, Christine doesn’t seem to know that Garmin is competing in Automotive and Aerospace markets as well.
on December 2, 2007 at 03:52 AM - LINKThis article is simplistically restating old news. Where has the writer been while this played out between Oct. 31 and the first couple of weeks in November? As an investor, I’d be more interested in reading critical analysis that provides insight regarding Garmin and TomTom going forward…not what’s already been priced in.
on December 2, 2007 at 06:43 AM - LINKI don’t understand why journalists take the view on Garmin and the GPS industry in general that they do.
For one, Garmin forced their largest competitor to pay over a billion dollars more for TeleAtlas, they bought then sold TeleAtlas stock at a SIGNIFICANT profit and they secured contracts with their current provider for another 6 years, probably using the money they made on TeleAtlas’ stock.
With the SEC now trying to decide if the sale of TeleAtlas should even go thru, this will further impact Tom Tom (& TeleAtlas’) focus. While they’re focusing attention and resources on SEC rulings Garmin will be focused on product and distribution.
Further, technology is changing at such a rapid rate that it’s VERY VERY unlikely that Garmin or Tom Tom will look like they do now (or even exist for that matter!).
Oracle, Yahoo, Google, Microsoft (to name a few) all rely on mapping software. We could expect a play by one of them, by another wireless provider (I’m keeping my eye on Google’s new android… surely GPS will be integrated into it), or even by some yet to be determined multi-national company.
Garmin having a contract thru 2015 sounds like a perfect amount of time. The playing field 5 years from now will not look like it does now. Maybe the purchase of TeleAtlas will steer TomTom strategy decisions towards mapping while Garmin’s reliance on a mapping provider will steer their strategy decisions towards devices. Only time will tell.
on December 2, 2007 at 10:25 AM - LINKThis article shows either an embarrassing lack of research or an atrocious bias. It is irresponsible to keep this article on this site. It reflects poorly not only on this website but on journalism. TomTom agreed to pay $4.3 billion to buy Tele Atlas and the deal is being examined by The European Commission for antitrust issues (http://www.bloomberg.com/apps/news?pid=20601085&sid=aggB_IHZ6Xdo&refer=europe). The way that the article portrays Garmin as a sinking ship and TomTom as the inevitable victor by failing to report several key facts makes me question the motives of the author. I beg the author to get her facts straight on this issue and to stop misleading readers.
on December 2, 2007 at 05:05 PM - LINK