Automotive > Infotainment & Telematics Blog

Apple Ain't Buyin' TomTom

by Roger Lanctot | Feb 06, 2020

Now that Apple’s new navigation maps are out it appears that the years-old rumors of an inevitable acquisition of TomTom by Apple can finally be laid to rest once and for all. With its new maps, Apple reveals a shift to home grown maps for the U.S. – with home grown maps for Europe coming soon, according to press reports.

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SOURCE: New map details in new Apple maps as shown in 2019.

The news preceded, by a week, TomTom’s lackluster quarterly report which tempered news of deals with Huawei, FCA and Subaru with the announcement of a substantial quarterly loss in Q4. TomTom ends the quarter with solid cashflow and $400M in the bank, thanks in part to the sale of its telematics unit to Bridgestone, but profitability remains elusive.

The shift by Apple did not appear to move TomTom's stock – which is still recovering from a minor dive following the announcement from Renault in the Fall of 2019 that it would be adopting Google’s in-vehicle connected navigation platform. On the earnings call yesterday TomTom did indicate its intention to shift to a more cloud-centric approach to navigation information delivery – much as rival HERE had announced a similar plan a year ago.

The real significance behind the Apple announcement though, relatively quiet as it was, was the reality that Apple has not yet given up the mapping battle. With billions of dollars to burn, Apple has decided that it wants to own its own map and frame its own location reality.

This puts Apple in unique company with Google, Alibaba, and Baidu – large global platform players that have sought to establish foundational building blocks for their technological empires. Sizing up these companies along with Amazon, Facebook and Microsoft there emerges a pattern where certain select assets are priotized.

List topping foundational assets include search, maps, speech recognition, cloud services, and advertising and transactional platforms. Possessing two or more of these assets appears to position these particular companies to dominate entire markets.

Maps are a special case. How a company collects and maintains its map data is an indication of an organization’s ultimate objective. In the case of Apple the company has moved to add pedestrian navigation, transit information, and 3D surround view capability – creating a smartphone-centric experience. Apple will also alert users to nearby Apple stores.

It’s likely that Apple has bigger fish to fry – including autonomous vehicles, cloud services, content delivery and drones – but there’s not enough to go by within the current Apple map offering. It’s clear, though, that Apple wants to own its map and evolve its map – rapidly. That’s not great news for TomTom, but it’s not an immediate threat.

Meanwhile, TomTom says its tinkering with infotainment enhancements – suggesting that the company is once again seeking a more vertically integrated in-vehicle experience. Most intriguing to me, though, is Trillian, TomTom’s test autonomous vehicle. It’s a reminder that map makers are increasingly thinking about creating vehicles even as vehicle makers are wondering if they can create their own maps. TomTom’s last quarter losses are a reminder that map making and maintenance remains an expensive business. It's a positive sign to see Trillian plying the streets of Berlin - I've been telling TomTom for years they needed a TomTom car. For now, a Volvo will have to suffice!

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SOURCE: TomTom's Trillian autonomous test vehicle in Berlin.

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