By Ville Heiskane and Martijn van der Starre
TomTom NV, Europe’s largest maker of portable navigation devices, advanced to the highest price in six weeks in Amsterdam after Apple Inc. agreed to use its digital maps in new mobile services.
TomTom rose as much as 16 percent to 3.81 euros, the highest level since May 2, and was up 14 percent at 10:08 a.m. local time. It was the biggest gainer on the 25-company benchmark AEX Index. The company’s stock had fallen 40 percent in the 12 months through yesterday.
TomTom said today its global agreement with Apple covers maps and related information after the maker of the iPhone and iPad yesterday unveiled the next version of its mobile software, adding maps to ratchet up pressure on Google Inc. Richard Piekaar, a spokesman for the Amsterdam-based company, declined to provide further details when contacted by Bloomberg News.
“The deal is a boost for TomTom because of the huge installed base of Apple product users and because of the brand and all that it stands for itself: innovation, ease of use and quality,” Martijn den Drijver, an Amsterdam-based analyst at SNS Securities, wrote in a note to investors. Den Drijver has a accumulate recommendation on TomTom shares.
TomTom, which once dominated the navigation industry before Google and Apple took market share with similar services on smartphones, provides digital maps that cover more than 200 countries and territories.
The financial implications of the agreement with Apple are less clear, Den Drijver said. “TomTom’s fee will largely depend on advertising revenue and a small nominal fee per map if turn- by-turn navigation is used, while it does stand to lose the regular navigation application revenue from the iTunes store.”
–Editors: Kenneth Wong, Thomas Mulier
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