TomTom has recently announced that it will be shifting its focus towards the mapping and navigation business and is going to lay off around 136 employees in pursuit of this. The company wants to build on its leading position in the navigation technology market. According to the press statement, 136 out of 4700 total roles were made redundant and out of the 136 roles made redundant, 57 were from Netherlands while the remaining were from US and Taiwan.
This change in direction started taking place after the announcement of the results of the second quarter, the company reported good profits for the automotive and licensing businesses, but the consumer products failed to net a high profit resulting in a 20 percent fall in revenue.
“We are not satisfied with the progress we are making (in sports),”
said TomTom CEO Harold Goddijn at the time.
What does this mean for the consumer wearable product line of TomTom?
This announcement does not by any means indicates that the company is totally moving away from the consumer wearables, it just shows that they are shifting more of their focus towards the navigation technology area of their business.
Despite the upward trajectory of the wearable market, the company has had a rough quarter and holds very low market share.
Companies such as Xiaomi and Fitbit are taking over even the well-established players such as Garmin, Samsung, and Fossil. Nevertheless, they have a very loyal fan following especially in the low-midrange wearable market. This is primarily because of the fact that their products offer great value for money.
How this announcement change the outlook of the company?
Since the inception of smartphones and their free or cheap navigation solutions, the company has observed a steep drop in market value, but still, after all those years has managed to hold its own in the world of navigation.
This gives us hope for the future of its wearable business as well, the company will continue selling all the sports-related products, it is just that they are re-organizing the structure of their consumer sports business to adapt to the changes in the market.
Their expertise in this area is highly valuable and very few competitors are able to offer similar value for money. Thus, we hope that they keep producing high-quality sports-related products for years to come.