Putting Android in cars is a ‘real threat’: TomTom CEO
Automakers have sought to keep web platforms at bay in a bid to protectively guard valuable car and user data. The partnership with the French-Japanese auto alliance lets Alphabet Inc.’s software control mapping and navigation, infotainment and a suite of apps directly installed in the car.
TomTom NV's head has warned carmakers about the risks of partnering up with Silicon Valley tech companies, after shares in the Dutch mapping company slumped.
'It's a real threat for the entire car industry to give the keys to the kingdom to a third party with its own strategy and tactics,' Chief Executive Officer Harold Goddijn said in an interview, citing concerns on privacy, client data and the loss of control on the part of the carmakers.
Shares in TomTom have tumbled over 25% this week, after Renault SA, Nissan Motor Co, and Mitsubishi Motors Corp. announced they would integrate Google's Android operating system in their car dashboards, despite an existing relationship with TomTom and traditional wariness by car companies of big tech platforms.
Automakers have sought to keep web platforms at bay in a bid to protectively guard valuable car and user data. The partnership with the French-Japanese auto alliance lets Alphabet Inc.'s software control mapping and navigation, infotainment and a suite of apps directly installed in the car.
'With Volvo and Renault-Nissan-Mitsubishi now opting for Google, which was unthinkable less than a year ago, and making it easier and cheaper or consumers to use their favorite apps, who knows how many [manufacturers] will follow?' NIBC Bank analyst Martijn den Drijver wrote in a note. 'It may be that Google becomes dominant with TomTom and HERE fighting for the scraps.'
The growth of in-dashboard navigation -- and its eventual use case for autonomous cars -- was seen as a key replacement of lost revenue for companies including Garmin Ltd. and Mitac Holdings Corp, as customers ditch satnavs for smartphone phones for their driving directions.
Garmin has partnered with automakers such as Honda Motor Co Ltd and BMW AG, while a consortium of German carmakers bought Nokia Oyj's digital-map unit HERE for 2.8 billion euros ($3.1 billion), in order to gain technology for connected cars that will eventually be the basis for self-driving vehicles.
Apple Inc. is also refocusing on its map product. The tech giant currently uses data primarily provided by TomTom and other sources. But for the past few years, Apple has been building a custom maps infrastructure, drawing from its network of more than 1 billion iPhones and information collected from vans touring the globe with cameras and high-tech sensors.
Google's new tie-up with the carmakers could be seen as a "critical moment" for the sector, said Goddijn. But just because the carmakers are using Android, that doesn't necessarily sideline TomTom completely.
Carmakers that choose to adopt the Android OS will still have the option to use TomTom for mapping, traffic and navigation, UBS analysts Francois-Xavier Bouvignies and David Mulholland wrote in a note.
Amsterdam-based TomTom has a diverse customer base with various large clients, none of which represent more than 10 %of the Dutch map maker's revenue. Analysts also noted that TomTom holds an advantage in the area of high-definition maps, which are important for autonomous driving.
That's a central focus of TomTom's existing partnership with Renault. TomTom in late 2017 said it was working with Renault on the carmaker's SYMBIOZ autonomous driving program by providing its HD maps, as well as engineering support and other products and services.
In the partnership with Google, the alliance stuck to standard definition for its maps, analysts noted.
Bank Degroof Petercam analyst Marcel Achterberg on Wednesday downgraded the recommendation on TomTom to reduce from hold. In Amsterdam, TomTom shares traded up 2.5 % on Thursday as of 12:04 p.m. local time, valuing the company at 1.48 billion euros.
Follow HT Tech for the latest tech news and reviews , also keep up with us on Twitter, Facebook, Google News, and Instagram. For our latest videos, subscribe to our YouTube channel.