TomTom profits drop 83% due to price cuts

By in Uncategorized on April 28th, 2008

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The war for the low end of the GPS market promises to be a bloody one, and it looks like TomTom’s suffered the first major injury: quarterly profits at the device maker dropped 83 percent from last year, and the company says it’s due to competitive price cuts. TomTom made a net profit of just €7.3M ($11.4M) that quarter compared to €44M ($66.2M) in the year-ago quarter, results which led the company to lower its outlook for the entire year.

The company actually sold 50 percent more devices than it did a year ago, but as PND prices steadily fall, it looks like TomTom will have to figure out a new way to pad those margins and refill its piggy bank whether that $4.2B all-cash Tele Atlas deal goes through.

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[Via TrustedReviews]

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Original post by Nilay Patel

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