TomTom and Apple Join Forces to Rule Map World

When Apple (NASDAQ: AAPL) announced it would launch its own map products, analysts wondered where the data would come from. The question was answered today when the world’s most valuable company set a partnership with Amsterdam-based map company TomTom. TomTom claims to have detailed map data for 200 countries. It also has what any map company its size would — turn-by-turn directions and real-time data on information such as traffic flow.

Google (NASDAQ: GOOG), particularly its Maps products, and Garmin (NASDAQ: GRMN), which competes with TomTom, are supposed to be hurt by the new Apple product. Rarely mentioned in the conversation is what will happen to the grandfather of online maps — AOL’s (NYSE: AOL) MapQuest. Microsoft’s (NASDAQ: MSFT) map product will be hurt as well. Apple’s deal with TomTom shows what happens when hardware and software are married. It also shows how hard it will be for map products without this kind of partnership to survive, or at least prosper.

MapQuest and the Microsoft product have thrived because have a loose tether to hardware, in both cases the PC. But the immediate use of maps by travelers of one sort or another has moved to portable devices because it is so useful to have maps when people are on foot or in a car. The PC relationship that was prosperous for so long has disappeared in just two or three years. It is another example of how new technology can sweep old standard bearers off center stage.

AOL and Microsoft counted on the PC-centric world to carry their map products into the future. Each missed the chance to extend their successes when products with which they now compete went mobile.

Douglas A. McIntyre