TomTom profits slump by a third

TomTom navigation TomTom said the market for personal navigation devices would shrink this year

Dutch navigation systems maker TomTom has reported a sharp drop in quarterly profits and forecast flat revenue for this year.

Net profit for the final three months of last year came in at 52m euros ($71m; £43m), down 29% on the 72m euros the company made a year earlier. Revenue fell slightly to 516m euros.

TomTom shares ended Friday down 11%.

The company faces increased competition from navigation services on smartphones, analysts say.

TomTom said consumer business revenues would "contract modestly" in 2011 due to a decline in the size of the market for personal navigation devices.

It also said it would spend more on research and development.

To compensate, the firm said it expected to sign more agreements with car manufacturers and license its products to more commercial customers.

TomTom is the largest maker of navigation equipment in Europe, but trails Garmin in the US.

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