Archive for the ‘Gear’ Category

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Tom Tom Navigation Not Going Anywhere But Up (Apparently)

Wednesday, March 3rd, 2010

Or so says the CEO of the company… but do you agree?

  • Despite the fact that both Google and Nokia have recently announced free turn-by-turn navigation on mobile phones, TomTom’s CEO, Harold Goddijn, is firm in his belief that these threats will not affect his company’s well-being or profitability.
  • Goddijn extolled his company’s proficiency in map-making, while downplaying the threat of competing companies offering free services that would replicate the functionality of his company’s GPS device on mobile phones, a service he says has existed for quite some time.
  • Tom Tom avoided experiencing a huge setback in the recession by cutting costs and focusing sales efforts on car manufacturers, fleet management services, map and traffic subscriptions and an iPhone app.

Facts and Figures

  • TomTom’s 2009 fourth quarter net profit came out to be 73 million euros ($99 million)
  • In the fourth quarter, sales rose 1% to 533 million euros, up from 528 million euros a year ago.
  • The company expects sales to be flat in 2010.

Best Quote

“We need to get away from the impression that the various navigation platforms are competing with each other.” – Harold Goddijn, Chief Executive Officer of TomTom NV

Consumption Gap Widens Between Haves and Have-Nots

Thursday, November 19th, 2009

While wealthier American shoppers have returned to patronizing high-end department stores, middle class consumers struggle to afford basics at Walmart.

  • Consumers at all income levels are focused on the value of their purchase and on not overspending.
  • Luxury chains report shoppers buying items such as shoes and dresses, while discount stores say their consumers are focused on food and socks.
  • Shoppers focused on saving in these economically tight times cannot afford to purchase items outside of the bare essentials.

Facts and Figures

  • The wealthy reigned in their spending most severely during the financial meltdown last fall.
  • Walmart has had to lower their prices to encourage their regular shoppers to continue buying.
  • Nordstrom’s third-quarter profit rose as sales improved compared with 2009.

Best Quote

“I used to consider shopping enertainment, but now I don’t think it’s enertainment.” – Patricia Murnane, Shopper and Risk Manager from New York

David Beckham May Be the King of Retail… In Madrid Anyway

Thursday, November 19th, 2009

Cristiano Ronaldo, soccer’s most expensive athlete, did not trigger a merchandising monster sale on the same scale as David Beckham did when he started playing for Real Madrid.

  • David Beckham, former English soccer team captain and Manchester United star, came to Real Madrid in 2003 with a large contract in hand and with high merchandising expectations. Basically, he sold a lot of jerseys!
  • Cristiano Ronaldo, the Portugese star forward, was the 2008 FIFA world player of the year and also came from Manchester United to Real Madrid.
  • The lack of jersey sales is somewhat being blamed on the economy, but perhaps it also indicates that Ronaldo is just not as popular as Beckham.

Facts & Figures

  • Ronaldo signed a new $133 million contract with Real Madrid in June, which is approximately three times more than Beckham received when he joined the club.
  • When Beckham joined Real Madrid, team income soared 27%. With the addition of Ronaldo in 2010, team income is expected to rise 3.5%.
  • Real Madrid jersey sales are roughly 20% lower now than they were during the Beckham era.

Best Quote

“There was a spike when Cristiano Ronaldo signed in the summer but there’s not such a big demand now. The economic crisis is taking its toll.” – Eugino Martinez, Shop Owner in Madrid, Spain

Pay More For Peace Of Mind?

Monday, October 19th, 2009

Seems like you can buy an extended warranty on anything these days, but is it really worth the investment?

  • Extended warranties are a big source of profit for both the retailers selling the product, but also for third party warranty dealers that operate outside of the retailers’ awareness.
  • Car dealers in particular try to sell extended warranties to increase their bottom line because the average car purchase today results in a net loss for the dealer.
  • In most cases, springing for the extended warranty probably isn’t worth it. But if you’re famous for breaking your cell phone, or the item you’re buying is known to break down a lot, it may save you a lot of repair and replacement money in the end.

Facts & Figures

  • 34.4% of new car buyers bought extended warranties in the first half of 2009.
  • 65% of Consumer Reports survey respondents reported that they spent more on their car warranties than they recouped in repair savings.
  • To extend the coverage on a Toyota Highlander to 8 years or 100,000 miles, an extended warranty will cost between $1,325 and $1,600.

Best Quote

“It’s insurance. It depends on the customer’s views about risk.” – Paul Taylor, Chief Economist for the National Automobile Dealers Association

Baseball’s Wealthiest Team Shares Profit With NYC

Wednesday, October 7th, 2009

When you get taken out to the ballgame in New York City, the local economy gets a serious boost…

  • In the first playoff season to visit the new Yankee Stadium in the Bronx, the New York City Economic Development Corporation estimates that each home game played in the 2009 postseason will bring $6.7 million in income to New York businesses.
  • The estimate takes into account money spent by visitors to the city who patronize hotels, restaurants, and transportation services. In addition, employees in and around Yankee Stadium will take home a total of about $900,000 after every game.
  • Does the economic benefit of these games outweigh the enormous costs of building a new stadium and all its related transportation and infrastructure changes? Not everyone is so sure. One Westchester State Assemblyman says the economic and employment benefits are not enough to justify the low-cost financing that was made available to the team for stadium construction.

Facts & Figures

  • The NYC Economic Development Corporation estimate assumes each postseason game will bring in 16,850 NYC residents, 27,500 residents of the NY/NJ/CT metropolitan area, 6,000 visitors from outside this area, 300 media from outside the area, and 200 players and affiliates.
  • Counting $5.2 million in “indirect economic impact” brings the total benefit to New York City to $11.9 million.
  • The new Yankee Stadium cost $1.5 billion and was largely financed by tax-exempt bonds that will eventually be repaid by the team.

Best Quote

“There is a modicum of economic advantage. The visiting teams travel with their press corps and entourage, some people will travel to New York, stay overnight and spend money on hotels and restaurants.’’ – Andrew Zimbalist, Professor of Economics at Smith College

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