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TomTom Loses Volvo Navigation Contract
TomTom International BV says its upcoming contract to provide navigation technology to Volvo Car Corp. has been canceled.
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TomTom International BV says its upcoming contract to provide navigation technology to Volvo Car Corp. has been canceled.
The deal, which was announced in 2016, was due to begin next year. Dutch financial analyst ING Group says Volvo switched to Google’s navigation system.
Volvo declined to comment. But earlier this year the carmaker said it planned to embed Google Maps in next-generation infotainment systems. On a call with analysts today, TomTom CEO Harold Goddijn attributed the contract loss to “user experience” with Google rather than lower pricing.
TomTom’s stock price slid 13% immediately after the announcement. Last month TomTom’s shares plunged about 25% when Google announced a deal to supply its Android operating platform (including Google maps) to the Renault-Nissan-Mitsubishi alliance. The move prompted investors to worry that TomTom had fallen to third place in the in-vehicle map market behind Google and market-leader HERE Global.
Despite the Volvo news, TomTom reported better-than-expected third quarter financial results and raised its full-year revenue to €850 million ($985 million) from €825 million ($956 million).
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