Rumors are circulating today that Apple has TomTom in its sights as a quick (and logical) fix to the Maps debacle. Buying TomTom would give Apple a ton of map experience and data to work with to fix Maps, but I would guess all TomTom-powered GPS units would probably fall by the wayside.
Based on this rumor, Bloomberg reported that TomTom stock was up markedly higher (as one might expect) but, let’s also more a little pragmatic here:
TomTom NV (TOM2), the Dutch supplier of navigation applications for Apple Inc. (AAPL)’s iPhone 5, rose the most in almost eight weeks after an analyst at Rabobank International said the U.S. company may make a takeover bid.
There’s a 30 percent chance that Cupertino, California- based Apple will seek a purchase because the Dutch software maker has the capacity to make speedy changes to correct any mapping errors or create new functions, Hans Slob, an Utrecht, Netherlands-based analyst at Rabobank, said in today in a research report.
“TomTom needs the cash from Apple, and Apple needs the know-how of TomTom,” said Slob, who estimated Apple would pay a price of as much as 10 euros per share for the supplier. A takeover is also a “royal way out” for the Dutch company’s founders, said Slob, who has a buy recommendation on TomTom and raised his share-price estimate by 38 percent to 5 euros.
Right, a 30% chance Apple would buy TomTom. Yeah, I’m not a betting man, but even I know that those are long odds.