The PND markets continues to grow strongly and their full-year 2006 guidance is increased.
The introduction of the new ONE model both in Europe and North America was successfully executed with a smooth transition from the existing range and rapid availability of the new product according to TomTom. Overall the third quarter was strong; they shipped a record number of PND’s and consumer demand for the new ONE and GO ranges was high. In Europe TomTom estimates that their market share was back up above 50 percent in September, following the supply shortages in the second quarter. They also estimate that in the third quarter the European market was 3.5 times larger than in the same period last year. The North American market is also growing strongly albeit off a smaller base than in Europe; they believe that the overall market size in the third quarter was more than 3 times the size versus the same period last year. TomTom continues to increase their footprint in North America. In August the ONE model was introduced in North America adding to the existing GO range. They also substantially expanded their distribution channel by increasing the number of outlets to 16,000 from 11,000 in the previous quarter. TomTom holds the second position in the market, with an estimated market share of 20% in September according to their own estimates.
TomTom now estimates that the European market for PND’s will grow to around 8 million units in 2006, up from 3.8 million units in 2005. They also estimate that the North American market for PND’s will grow to over 2 million units in 2006, up from 800,000 units in 2005.
TomTom now estimate that their volumes of PND’s will grow strongly to between 4.4 million and 4.7 million units shipped during 2006 and that revenue will be in the range of between €1.3 billion and €1.4 billion, nearly doubling last year’s revenue and increasing PND unit volumes more than 2.5 fold.
Third quarter financial highlights compared with Q3 2005
• Revenue increased by 41 percent to €353 million
• 1.2 million portable navigation devices (PND’s) shipped, up 119%
• Gross margin increased by 1 percentage point to 44%
• Net profit increased by 24% to €73 million