CASE 7
TomTom: New Competition
Everywhere!
Alan N. Hoffman
Rotterdam School of
Management, Erasmus University
and Bentley University
T omTom is one of the largest producers of
satellite navigation systems in the world,
comprised of both standalone devices and
applications. It leads the navigation systems market in
Europe while it stands second in the United States.
TomTom attributes its position as a market leader to
the following factors: the size of its customer and
technology base; its distribution power; and its
prominent brand image and recognition.1
With the acquisition of Tele Atlas, TomTom has
become vertically integrated and also controls the map
creation process now. This has helped TomTom
establish itself as an integrated content, service and
technology business. The company is Dutch by origin
and has its headquarters based in Amsterdam,
Netherlands. In terms of geography, the company’s
operations span from Europe to Asia Pacific, covering
North America, Middle East and Africa.1
TomTom is supported by a workforce of 3,300
employees from 40 countries. The diverse workforce
enables the company to compete in international
markets.2 The company’s revenues have grown from
€8 million in 2002 to €1.674 billion in 2008. However,
more recently, because of the Tele Atlas acquisition
and the current economic downturn the Company has
become a cause of concern for investors. TomTom
reported a net loss of €37 million in the first quarter of
2009.3
TomTom is in the business of navigation based
information services and devices. The company has
been investing structurally and
strategically in Research and Development to bring
new and better products and services to its customers.
The company’s belief in radical innovation has helped
it remain at the cutting edge of innovation within the
navigation industry.
The vision of TomTom is to improve people’s
lives by transforming navigation from a don’t- get-lost
solution into a true travel companion that gets people
from one place to another safer, faster, cheaper and
better informed. This vision has helped the company
to be a market leader in every market place in the
satellite navigation information services market.
The objectives of the company focus around
radical advances in three key areas:4
Better Maps: This objective is achieved by
maintaining TomTom’s high quality map data base
that is continuously kept up to date by a large
community of active users who provide corrections,
verifications and updates to TomTom. This is
supplemented by inputs from TomTom’s extensive
fleet of surveying vehicles.
Better Routing: TomTom has the world’s largest
historical speed profile data base IQ Routes™
facilitated by TomTom HOME, the company’s user
portal.
The author would like to thank Will Hoffman, Mansi Asthana, Aakashi
Ganveer, Hing Lin, and Che Yii for their research. Printed by permission of
Dr. Alan N. Hoffman and www.ecch.com. Copyright © 2010 Alan N.
Hoffman. No part of this publication may be copied, stored, transmitted,
reproduced or distributed in any form or medium whatsoever without the
permission of the copyright owner.
 C-108 Part 2 Cases in Crafting and Executing Strategy

Better Traffic Information: TomTom possesses spoken navigation and unique routing technology that
unique real time traffic information service TomTom our 30 million portable navigation device users rely on
HD traffic™ which provides users with high quality, every day,” said Corinne Vigreux, Managing Director
realtime traffic updates.4 These three objectives form of TomTom. “As the world’s leading provider of
the base of satellite navigation, working in navigation solutions and digital maps, TomTom is the
conjunction to help TomTom achieve its mission. most natural fit for an advanced navigation application
on the iPhone.”4
The TomTom app for iPhone 3G and 3GS users
TOMTOM’S PRODUCTS includes a map of the U.S. and Canada from Tele
Atlas, and is available for $99.99 USD.
TomTom offers a wide variety of products ranging The TomTom app for iPhone includes the
from portable navigation devices to software navi- exclusive IQ Routes™ technology. Instead of using
gation applications and digital maps. The unique travel time assumptions, IQ Routes bases its routes on
features in each of these products make them truly the actual experience of millions of TomTom drivers
“the smart choice in personal navigation.”1 Some of to calculate the fastest route and generate the most
these products are described below. accurate arrival times in the industry. TomTom IQ
Routes empowers drivers to reach their destination
faster up to 35% of the time.
TomTom Go and TomTom One These
devices come with a LCD screen that makes it easy to
use with fingertips while driving. They provide 1,000 COMPANY
Points of Interests (POI) that help in locating petrol
stations, restaurants and places of importance. A BACKGROUND
number of other POIs can also be downloaded. Company History
Precise, up to minute traffic information, jam alerts
and road condition alerts are provided by both these TomTom was founded as Palmtop in 1991 by
devices.5 Peter-Frans Pauwels and Pieter Geelen, two graduates
from Amsterdam University, Netherlands. Palmtop
started out as a software development company and
TomTom Rider These are portable models was involved in producing software for handheld
especially for bikers. The equipment consists of an computers, one of the most popular devices of the 90s.
integrated GPS receiver that can be mounted on any In the following few years the company diversified
bike and a wireless headset inside the helmet. Similar into producing commercial applications including
to the car Portable Navigation Devices (PNDs), the software for personal finance, games, a dictionary and
TomTom Rider models have a number of POI maps. In the year 1996, Corinne Vigreux joined
applications. The interfaces used in TomTom Rider Palmtop as the third partner. In the same year, the
are user friendly and come in a variety of languages.5 company announced the launch of Enroute and Route-
Finder, the first navigation software titles. As more
and more people using PCs adopted Microsoft’s
TomTom Navigator and TomTom operating system, the company developed
Mobile These applications provide navigation applications which were compatible with it. This
software along with digital maps. Both of these helped the company increase its market share. The
applications are compatible with most mobiles and year 2001 marks the turning point in the history of
PDAs, provided by companies like Sony, Nokia, Acer,
Dell and HP. These applications come with TomTom
HOME which can be used to upgrade to the most
recent digital maps and application versions.3
TomTom for iPhone
On August 17, 2009, TomTom released TomTom for
the iPhone. “With TomTom for iPhone, millions of
iPhone users can now benefit from the same
easy-to-use and intuitive interface, turn-by-turn
 Case 7 TomTom: New Competition Everywhere! C-109

TomTom. It was in this year that Harold Goddijn, the
former Chief Executive of Psion joined the company
as the fourth partner. Not only did Palmtop get
renamed to TomTom, but it also entered the satellite
navigation market. TomTom launched TomTom
Navigator, the first mobile car satnav system. Since
then, as can be seen in Exhibit 1, the company has
celebrated the successful launch of at least a product
each year.3
In 2002, the company generated revenue of €8
million by selling the first GPS-linked car navigator,
the TomTom Navigator to PDAs. The upgraded
version, Navigator 2 was released in early 2003.
Meanwhile, the company made efforts to gain
technical and marketing personnel. TomTom took
strategic steps to grow its sales. The former CTO of
Psion, Mark Gretton, led the hardware team while
Alexander Ribbink, a WORK through WEBfleet
former top marketing official looked after sales of new
products introduced by the company.
TomTom Go, an all-in-one car navigation sys-
tem, was the next major launch of the company. With
its useful and easy to use features TomTom Go was
included in the list of successful products of 2004. In
the same year, the company launched TomTom
Mobile, a navigation system which sat on top of smart
phones.3
TomTom completed its IPO on the Amsterdam
Stock Exchange in May 2005. It raised €469 million
($587 million) from this offer. The net worth of the
company was nearly €2 billion after the IPO. A
majority of the shares were with the four partners.6
From the years 2006 to 2008, TomTom strengthened
itself by making three key strategic acquisitions.
Datafactory AG was acquired to power TomTom

Exhibit 1 Company history

Year Historical Event

HDTraffic &
Founded Renamed Navcore IPO MapShare

1991 Palmtop founded by Harold Goddijn, Peter-Frans Pauwels and Pieter Geelen.
1994 Corinne Vigreux joined the Company to sell Palmtop applications in Europe.
1996 First navigation software for PDAs, EnRoute and RouteFinder launched.
2001 Palmtop renamed TomTom. Harold Goddijn joins TomTom as CEO. Number of employees 30.
2002 First GPS-linked car navigation product for PDAs, TomTom NAVIGATOR shipped. €8 million revenue.
2003 NavCore Software Architecture developed, on which all TomTom products are still based. Number of
employees 90.
2004 First portable navigation device shipped, the TomTom GO. 248,000 PND units sold.
2005 TomTom listed on Euronext Amsterdam.€720 million revenue.
2006 TomTom WORK and TomTom Mobility Solutions launched. Number of employees 818.
2007 TomTom makes offer for Tele Atlas. TomTom HD Traffic and TomTom MapShare launched. 9.6
million PND units sold.
2008 TomTom acquired Tele Atlas.

Source: http://investors.tomtom.com/overview.cfm