Going Mainstream - GPS Declassified: From Smart Bombs to Smartphones - page 136

Prices for portable car navigation devices dipped below $500 in 2004, while
the industry shipped an estimated sixty thousand in-car units, more than dou-
bling the previous year's shipments. 97 Also in 2004 the first nationwide traffic
alerts system to guide commuters around tie-ups arrived via xm satellite radio's
NavTraffic service, incorporated into Pioneer and Alpine units. 98 Mobile nav-
igation sales rose in 2005 to $114.9 million, and the top five brands continued
to hold 95 percent of the market. 99 However, Garmin moved ahead of Magel-
lan to claim the top ranking, and a new brand joined the list, which now read
Garmin, Magellan, Pioneer, TomTom, and Alpine. 100 While Garmin boasted
the largest market share in the United States, Amsterdam-based TomTom,
with the largest share of the European market, claimed the worldwide lead.
A quick overview of these two gps heavyweights is in order.
Garmin's founders, Gary L. Burrell and Dr. Min H. Kao, formed the com-
pany in 1989 to take advantage of the revolution they saw gps bringing to nav-
igation. 101 Both had worked for major technology companies, including Allied
Signal, where Kao led development of the first gps navigator certified by the
faa. 102 When the company went public in December 2000, it had worldwide
annual revenues of $345 million, production facilities in Kansas and Taiwan,
and extensive product lines serving the aviation, automotive, marine, and rec-
reational markets. 103 After claiming the top U.S. market share in pnds in 2005,
Garmin remained the leader through 2012, when it reported $2.72 billion in
total revenue and sold more than fifteen million units worldwide. 104 However,
that was 22 percent below its best year, 2008, when it achieved $3.49 billion
in revenue. 105
TomTom, founded in 1991, initially focused on developing software for
mobile devices such as handheld barcode scanners for businesses and per-
sonal digital assistants (pdas) for individuals. 106 It launched its first navigation
application for pdas in 2002 and its first standalone pnd in 2004. pnd sales
jumped from a quarter-million units in 2004 to 1.7 million in 2005, when the
company went public. It then acquired a German company, Datafactory, which
specialized in vehicle telematics (information technology across long distances),
giving TomTom entrée into fleet management services. Two years later Tom-
Tom acquired an automotive engineering division of Siemens and one of the
two largest global mapping companies, Tele Atlas, to position itself for entry
into the in-dash navigation market. TomTom reported €1.1 billion in total rev-
enue in 2012, a 17 percent annual decline due to lower pnd sales and 36 per-
cent below its best year, 2007, when it achieved €1.74 billion in revenue.