There was a time when Global Positioning System (GPS) devices--dominated by Garmin and TomTom--are essential in every car, helping drivers navigate roads and highways without the need for hard-to-read maps and trying to catch traffic alerts on the radio. However, with free GPS services being offered on smartphones, the days of the GPS devices are nearing its end. After much contemplation about its future, TomTom is set to halt its production of stand-alone GPS devices (or Personal Navigation Devices as they call it).

"The PND business is important and will remain an important part of our business and revenue, but the market size in absolute terms is shrinking and we need to adapt our costs, some of which are variable and some aren't," said TomTom CEO Harold Goddijn in their earnings report. The company sales are down 23% last quarter and with the fast-shrinking market, they can no longer afford or risk making devices that were configured for a larger market.

TomTom will instead set its focus on developing automotive and embedded systems, something its biggest threat--Google--has almost no foothold, except in the case of Audi 7. Expect TomTom GPS systems to be included in cheaper cars, especially since people still associate the TomTom brand with its efficiency in navigation. However, TomTom would like to hope that Google or even Apple would not try to rain on their very thin parade.

Source: Reuters, via TechCrunch