Peter-Frans Pauwels was one of the original founders of TomTom back in 1991, when the company started importing Psion computers into the Netherlands. Under his watch the company has changed from dealing with B2B software into a satnav giant, and cornered the mapping market after the millenium. And now it's changing again.
At IFA 2015 it unveiled the TomTom Spark sports watch. With the ability to play music straight from the wrist, the company believes that it's found a new niche – and the benefit of leaving the smartphone at home will resonate with consumers.
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"We always thought hard about what problem we were going to solve, and we learned quickly to make things easy to use," Pauwels told Wareable.
"It wasn't until late 90s when we thought to go to the consumer space, targeting owners of Psion products. That was not opportunistic, we saw a need from the people buying these things."
Most people know TomTom as a satnav company, but until 2000 it made everything from bookmaking applications to digital bibles for Palm PDAs:
A future beyond satnavs
"In 2001 we broke through with our satnav app and our revenue went from €2 million to €9 million in one year. So after that we just made ourselves a satnav company and stopped everything else," said Pauwels.
But it hasn't stayed that way. In 2011 TomTom launched its first running watch, and since than has moved into golf GPS watches and action cameras as well. It's realised that its key markets won't be around forever, and that in-car navigation is bound to end up built right into the car.
"In the minds of most people today, we are a satnav brand. But in the longer term, satnav is going to be built into the car: think about automated and self driving cars, maps belong in the cars," Pauwels said. "I think what is happening is that we are becoming a sports brand.
"We are clearly investing in fitness and in action cameras, so we are indeed broadening our brand to cover that. TomTom used to bring you from A to B now TomTom brings you from A to where you want to be. That's marketing" he laughed.
While TomTom has been making fitness devices since 2011, Pauwels is under no illusion that the market is anything other than nascent. But he believes that TomTom's heritage in focusing on one problem at a time offers a more considered and coherent approach than its rivals.
The big wearable opportunity
"For us, what we see when we look at the larger wearables space is the start of things. And a lot of people are coming to this big opportunity, dancing around it, wondering what's going to work and what's not going to work. Throwing things at the wall to see what sticks. Some of them successfully," he said.
"We feel the opportunity. Sensors are getting smarter, data analytics is getting better. Giving people the right kind of information is all growing.
"What we've done is recognise a need in the fitness space. You tackle it problem by problem, which is how you become more sophisticated. This is more confident and considered than others. We want to solve a problem that people understand," he added.
While the previous generations of TomTom running watches were for hardened runners, Pauwels sees the Spark as a mass market device. And believes this offers an opportunity for the company to grab a bigger slice of the market.
"It's a move to a broader audience and asks the question what are wearables going to mean in our lives? This allows us in a focused way to learn about human behaviour and to innovate and build up a large user base."
But does that put them on a similar trajectory to Garmin, which also makes its money from satnav, but has invested in becoming a key sports brand? Its running watches are held in the highest regard, it sponsors a Tour De France team and has launched its own GPS-enabled action camera. How does Pauwels see his biggest competitor?
"I don't like talking about my competitors, but think it's a fair comparison. In terms of the consumer electronics space, we are changing into a fitness brand."
Garmin recently added heart rate tracking to its new Forerunner 225 running watch, something that TomTom has had since 2014. And Garmin has chosen Mio technology for its product, which is the exact technology that TomTom has jettisoned from the Spark in favour of its own solution. And Pauwels believes this gives TomTom an advantage.
One step ahead of the competition
"Our previous generation used Mio – so we are now one step ahead of them [Garmin]. And we are going to go deeper and deeper. We do most of the heart rate sensing," he said.
While the company buys in all its sensors, Pauwels says TomTom doesn't like to settle for using other companies' technologies. And the decision to branch out on its own for heart rate sensing comes from the same logic as it rejecting off-the-shelf action camera technology.
"It's similar with our camera. GoPro and the action camera market is the same. They go to the Far East they get a full camera on a chip and they put the plastics around it and the lens. We said 'no', we're going to have a full Linux computer in there, then we can really innovate."
And this innovation is changing TomTom internally as well, and Pauwels says the company is buzzing about sports.
"TomTom is many parts, and we have built satnavs for a long time. And now we are in a super exciting space like wearables, you can imagine what that does to the drive of everyone and the excitement. There's a great atmosphere and a great pulse."
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