May 19, 2015 / 6:20 AM / 2 years ago

TomTom shares jump after Apple renews digital maps contract

AMSTERDAM (Reuters) - Dutch navigation systems company TomTom NV said Apple Inc would continue to buy its digital maps, giving a vote confidence that sent the Dutch company’s shares more than 7 percent higher to a near six-year high.

A TomTom navigation device is seen in this photo illustration taken in Amsterdam February 28, 2012. REUTERS/Robin van Lonkhuysen/United Photos

TomTom did not release details of the latest deal between the two companies, which some analysts said may be skewed in Apple’s favor due to the prestige that accrues to TomTom for working with the U.S. company.

TomTom has licensed digital maps to Apple since 2012, when it beat Google Inc to supply the built-in mapping apps in Apple products, starting with the iPhone 6.

The renewal of the contract comes as Nokia reviews strategic options for its digital mapmaking arm HERE, the largest seller of mapping technology to carmakers.

Although analysts see Uber or a group of German carmakers as the most likely buyer of HERE, along with private equity firms, Apple had also been considered a candidate.

In a client note, ING analyst Marc Zwartsenburg said: “This flags that Apple has still not found an alternative for its mapping sourcing”.

Zwartsenburg, who rates shares a “buy”, said that depending on the price HERE eventually fetches, ING could raise its one-year share price target for TomTom to as high as 13.5 euros from 11 euros at present.

TomTom aims to become a leading provider of technology for self-driving cars as it reinvents itself after years of slow progress, Chief Executive Harold Goddijn told Reuters this month..

TomTom shares were up 6.7 percent at 8.834 euros by 0726 GMT, after rising as high as 8.934 euros, their highest since late 2009. The stock is up 57 percent year-to-date, as TomTom has won several large automotive contracts and investors re-rate the value of its mapping technology.

Reporting By Anthony Deutsch and Toby Sterling; Editing by David Goodman and David Holmes

Our Standards:The Thomson Reuters Trust Principles.
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