The consumer tech sector takes another hit as GPS gadget maker TomTom became the second outfit to warn of a big revenue shortfall.
The No.2 navigation device maker says slumping demand and an escalating price war caused it to cut its first-quarter and full-year sales forecast. The company says it now expects first-quarter sales to be around $416 million, well below the $540 million range that was expected. For the full year, TomTom says it expects sales in the $2.9 billion range, below expectations in the $3.4 billion vicinity.
Though TomTom said the greatest drop in business was in Europe, shares of U.S. rival Garmin GRMN took a 4% fall as investors see more evidence of a slowdown in a once-hot electronics segment.
TomTom’s warning comes less than a day after PC chipmaker AMD AMD cut its first-quarter numbers on weak sales across all its business lines. The news adds more concerns about the health of tech spending overall. To date, the sales weakness has largely been felt among suppliers to big businesses. Networking gearmakers like Riverbed rvbd have cut projections and tech giant Cisco csco is doing some belt tightening as corporate orders slip.
Now with continued PC market woes and an even steeper than expected skid in the GPS market, it seems the slowing economy may be dragging down consumer spending in a few key areas.