Dutch tech company TomTom is possibly taking a step back from the wearable segment due to a recent history of poor sales and the departure of many top executives, according to a new report. More specifically, TomTom’s sports wearable segment is most affected by poor performance, having fallen short of expectations, according to a recent comment that TomTom CEO Harold Goddijn made during a call with investors. The company’s 2017 second quarter earnings report showed a 20 percent drop in consumer profits compared to Q2 2016. The company is now reconsidering its position in the wearables space and is shifting its focus to the automotive, licensing and, telematics businesses. Another indication that the company, which manufactures action cameras, GPS sports watches, and fleet management systems, is withdrawing from the wearable market is the fact that it reportedly scrapped its plan for a Bandit 2 action camera, as sales of the Bandit lineup have not been going well. The company also makes fitness tracker, as well as traffic, navigation, and location-based services.
If the subpar performance of its sports segment is any indication, it would make sense for TomTom to step back from the wearables market and shut down its sports wearable business in order to ensure the company’s survival in the long term. Otherwise, it might not afford to bear the burden of a losing business moving forward, and Goddijn is seeing the necessity for reassessment of the firm’s sports unit. Recent reports also indicate that many key positions at the company’s wearables division have been left vacant earlier this year after several executives left the company. The list of departed names includes Patrick Stal, the former vice president of marketing for TomTom Sports, and Gabriella Costa Grillo, TomTom’s former global product marketing manager for wearables. The two executives have reportedly left TomTom to join Uber.
The news that TomTom seems to be abandoning its wearable business comes as a bit of a surprise since it was only this January that the company unveiled two GPS units along with a sports and fitness app at the Consumer Electronics Show in Las Vegas, thus marking a serious foray into the fitness wearables segment.