PREVIEW-Investors focus on TomTom holiday outlook

* Q3 results due on Oct. 28 at 0630 GMT

* Net profit seen down 50 pct

* Eyes on outlook and holiday season

By Harro ten Wolde

AMSTERDAM, Oct 26 (Reuters) - Investors in Dutch navigation
device maker TomTom (TOM2.AS) are hoping upbeat news on the
upcoming holiday season will offset an expected 50 percent drop
in net profit.

TomTom is seen reporting a third quarter net profit of 29
million euros ($43.61 million), according to the mean in a
Reuters poll of 11 analysts. [ID:nLN155707]

Remarks last month by the maker of portable navigation
devices (PNDs) and mapping software that the market was slightly
picking up fuelled investors' hopes for an upbeat outlook
[ID:nL0610449].

"We expect a relatively good fourth quarter holiday season.
Shipments to retailers and sales to consumers could develop
better than expected as retailers are growing more optimistic
about consumer demand for the year-end 'make or break' holiday
shopping season," analyst Michiel de Jonge at Rabo Securities
said.

The navigation market, once a duopoly between PND giants
Garmin (GRMN.O) and TomTom (TOM2.AS), has suffered dramatically
from the recession as consumers cut spending on the electronic
gadgets.
The market now also includes the likes of Research In
Motion's (RIM.TO) BlackBerry, Apple's (AAPL.O) iPhone and
offerings from Palm PALM.O, Nokia (NOK1V.HE) and Taiwan's HTC
(2498.TW), with GPS chips using satellites to pinpoint the
location of the user.

TomTom and Garmin are dealing with the challenges in their
own way. Garmin, primarily a hardware maker, made its own
smartphone, the navigation-enabled nuvifone, while TomTom, which
has its roots in software, shifted to providing content via map
data and built-in car navigation systems and, more recently, an
iPhone application.

In the long term smartphones are expected to eat into
TomTom's and Garmin's businesses but for the short term the two
can still lean on their market dominance.

"We expect margins to have held up solidly given the
apparent lack of aggressive competition in the PND market as
smaller players continue to struggle with the sharp decline in
business trends," Nomura's Stuart Jeffrey said.

TomTom raised net proceeds of 400 million euros from a
rights issue and a private placement before the summer, taking
away fears for its 1 bln euro net debt load.

Since then TomTom has announced an unusual number of new
product launches for the fourth quarter that may help gross
margins as well, analysts expect.

Investors hope TomTom management may restart giving
concrete guidance.

In February TomTom said it expected to sell 11 to 12 million
PND's in 2009 and post revenue of 1.4 billion euros to 1.6
billion euros. In April, however, the company said it would not
reiterate the forecast as it needed more clarity.

($1=.6650 Euro)

(Editing by David Cowell)