TomTom Jumps on Agreement With Apple Over Global Maps
TomTom NV (TOM2), Europe’s largest maker of portable navigation devices, advanced the most in more than seven months in Amsterdam after Apple Inc. (AAPL) agreed to use its digital maps in new mobile services.
TomTom rose 16 percent to 3.80 euros, the largest increase since Oct. 24. The stock was the biggest gainer on the 25- company benchmark AEX Index, paring TomTom’s 12-month decline to 30 percent.
TomTom said today that 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.
“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 dominated the navigation industry before Google (GOOG) 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.”