Cain Velasquez schreef op 28 november 2014 19:49:
Analyst vs. Analyst: Apple, TomTom, HERE
by rlanctot28-11-2014
I published a blog about a week ago (http://tinyurl.com/m8x7tqa - Apple Needs to Buy TomTom Now) suggesting that Apple ought to finally buy TomTom. Apple has been using TomTom map data to prop up its in-house navigation offering and I was suggesting that an acquisition was in order given TomTom’s tenuous market and financial position – the company has had to shift its focus from fast-growth mobile devices to slow growth automotive and fleet market opportunities and, most recently, cloud-based services.
My argument was based on Apple’s ongoing struggle to bring its CarPlay smartphone integration solution to the market following a spectacular debut at the 2014 Geneva Motor Show. In Geneva, Apple had working CarPlay demos in Volvo, Ferrari, and Mercedes-Benz vehicles on the show floor. Fast forward to last week’s L.A. Auto Show and CarPlay is still only a demo with availability in showrooms not anticipated until Spring 2015 at the earliest.
Until last year, speculation regarding an Apple acquisition of TomTom was an annual analyst ritual. It seemed to make sense except for the fact that 1) it never happened and 2) Apple didn’t need to buy TomTom since it was getting what it wanted: TomTom’s maps.
Finally getting the message – that such an acquisition was NOT going to happen – speculation dried up in 2013. There were no more rumors of an imminent Apple acquisition of TomTom. But given Apple’s stumbles I figured the time was right for valor to prevail over discretion. Apple should buy TomTom now, with a small portion of its overseas cash holdings, and straighten out its location strategy once and for all, was my argument.
A colleague of mine at Strategy Analytics, Nitesh Patel, meanwhile weighed in to point out in a blog of his own this week (http://tinyurl.com/kmal6rs - Why Apple Should Ditch TomTom and License HERE Map Data) that Apple would be better off ditching TomTom and licensing rival HERE’s data. HERE’s data set encompasses automotive, pedestrian and in-door navigation for a wide range of applications and at a greater degree of accuracy than TomTom's, or so he argues.
Such decisions ought to but do not always yield to logic. HERE arguably has the superior mapping and location product offering based on scope, breadth of data gathered and accuracy. But TomTom has superior crowd-sourcing elements and traffic data. In fact, thanks to Apple probe data believed to be shared with TomTom, executives in the automotive industry increasingly recognize TomTom as the market leader in traffic data quality – a challenging metric to pin down but one that TomTom appears to have mastered.
Apple has cobbled together a portfolio of location technology and mapping acquisitions including Placebase, C3 Technologies, Locationary, Hopstop.com, Embark, and Broadmap. But a coherent integration of these assets has yet to emerge.
What these acquisitions point to, however, is Apple’s inclination to make bite-sized acquisitions rather than monster purchases of the type that TomTom would represent. (This inclination was noted by commenters to my previous blog.) TomTom’s annual revenue fell below $1B in 2013 and is still experiencing a downward revenue trajectory. But the decline in revenue has not yet assumed the proportions of a crisis and Apple may have more leverage as a TomTom customer than as a TomTom owner.
More importantly, TomTom is bigger and more established than the kind of companies that Apple normally considers as an acquisition candidate. There’s not much upside left in TomTom in the eyes of Apple.
But licensing HERE data will give Apple little or no leverage. While HERE is a far more customer-friendly B2B company today than it ever was in the past, it still marches to its own drum and is unlikely to craft solutions specifically for Apple.
While my colleague’s post made a brave, if brief, case for Apple to license HERE data I believe the far more likely outcome is that both of us are wrong. Apple will continue to license TomTom’s data.
Apple can effectively throw its weight around at TomTom demanding changes or enhancements to the map data. Apple is, by far, TomTom’s largest and most strategic customer.
The licensing of HERE data is the threat suspended over the head of TomTom by Apple like a sword of Damocles. TomTom dare not displease its most important patron.
A potential wild card in the mix is interest in TomTom from other quarters ranging from Alibaba (TomTom’s joint venture partner in China now that Alibaba owns Autonavi) and Facebook to Microsoft or Google. Apple must forever weigh TomTom’s ability to maintain its independence against Apple’s own ambitions in location and navigation.
Perhaps the final question is whether Apple needs either TomTom or HERE in the long run. OpenStreetMaps is always an available option, particularly if Apple chooses to eschew the expensive process of building its own map from scratch. (There is hardly any doubt that Apple has already crafted the fundamental map geometry from its work with TomTom.)
The argument against Apple acquiring TomTom is strong given the fact that much of the value seems to already have been wrung out of the organization. Buying it now for what will likely be a $10B+ price tag becomes a very expensive defensive maneuver.
So, I conclude that Apple probably won’t buy TomTom and probably won’t license HERE data. But I still think the TomTom acquisition is a more likely year-end moonshot than a shift to licensing HERE map data. What do you think?
blogs.strategyanalytics.com/AMCS/post...