TomTom, the Dutch maker of personal navigation devices (PNDs), reported unaudited sales rose 1% to €533 million ($878.2 mm) in the fourth quarter, reflecting the continued rapid decline in average sales price that is expect to accelerate this year as smart phone networks begin incorporating GPS features in their handsets.


The figures, released last week, represented sales of 5.1 million PNDs worth €402 million ($593.8mm), compared to 4.4 million PNDs worth  €444 milliion in the year earlier quarter. TomTom said its other revenues, which include automotive, work, map and traffic subscriptions and phone solutions, rose 175%. Those revenues will become more important going forward. For instance, the company sold 100,000 downloads of its TomTom application for the iPhone in the fourth quarter.

In the fourth quarter the European and North American markets for PNDs combined were flat year on year, at 12.9 million units as sales declined in Europe and rose in North America. In Europe PND revenues decreases 13% from 4.9 million to 4.3 million units. In North America the market increased by 8% from 8.0 million to 8.6 million units.


Our market share in Europe increased sequentially from 45% to 46%. In North America our market share increased sequentially from 20% to 29%, said TomToms CEO Harold Goddijn. We sold 11.6 million units in total and expect to sell a similar number of units in 2010.


 The company said operating profits reached €113 million ($169.9mm), up 61% from the fourth quarter a year earlier. Operating margins reached 21% compared to 13% a year ago.


For the full year, the company reduced operating expenses by €127 million ($187.6mm) to €500 milliion ($738.5mm). Operating results declined 5% to €231 million ($341.2mm). The company ended the year with €442 million in net debt, less than half the €1,109 million from a year earlier.


Look forward to 2010, the company said it expected broadly flat revenue and earnings per share compared to last year.

We made our assumptions bearing in mind that free turn-by-turn navigation on some smartphone platforms will be available in our major markets, said Goddijn. The industry we operate in is going through substantial change, said TomToms CEO Harold Goddijn. Increasingly, digital maps are being deployed in the battle for mobile phone screens, either via smartphone or mobile internetapplications. We see limited impact from this on our current revenue streams from PNDs, automotive and fleet management. The demand for applications that use location will grow across all markets and all geographies, and we see new opportunities for partnerships and business models, particularly in the mobile space.