BUY OR SELL-TomTom down too much after Google move?

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* Google moves into navigation software market

* TomTom shares down more than half from 1-year high

* Short-term effect limited, long-term negative impact seen

By Harro ten Wolde

AMSTERDAM, Nov 5 (Reuters) - Shares in Dutch navigation device maker TomTom NV (TOM2.AS) have lost about a third of their value since Google Inc (GOOG.O) said last week it would move into phone-based navigation. [ID:nN27274525]

TomTom shares are hovering near three-month lows after it said last week average selling prices for its navigation devices (PNDs) were below analyst forecasts, while Google said it would weave technology for driving directions into new versions of its software for mobile phones. [ID:nLS458927]

TomTom shares have plummeted more than 50 percent from a year's high of 13.65 euros set in September after the launch of its software to turn Apple Inc's (AAPL.O) iPhone into a navigation device.

Are the shares at a realistic level now or should investors be ready for another beating?

GOOGLE'S THREAT OVERSTATED, BUY

Some see TomTom's technology giving it a lead over anything Google has to offer.

Jos Versteeg, analyst at Amsterdam based Theodoor Gilissen, saw Google's entry as having a limited effect, adding TomTom has a big technological lead and high quality software which would protect it from price pressures.

"Few shares have been halved in the past months. In this perspective we see the recent share drop as a good moment to buy," Versteeg said, upgrading the shares to "buy" from "hold".

RBS analyst Wim Gille noted barriers to enter the navigation market are still high. "There are not many companies in the world that have the deep pockets and the business case to build a map, while most mobile companies do not want to depend on Google and Nokia alone," he said, keeping the shares at "buy".