Dutch Personal Navigation Device company TomTom posted a dramatic 83% first quarter drop in European earnings thanks to a number of factors; many of which could add up to the commodification of GPS.

TomTom warned of its diminishing revenue first when it lowered its full-year guidance from €2.14 billion to €1.8-2.0 billion in the beginning of April as stocks dropped 13% in value internationally.

"I don't think it's a slowing down of the market overall," CEO Harold Goddijn said in a subsequent conference call.

But then, during the company's 2008 first quarter earnings call, TomTom announced an unexpected 83% drop in earnings. The prior year's total first quarter earnings were $70.3 million, and this year's were only $12 million. Additionally, sales revenue fell 22% to $147 million.

NPD research shows that historically, TomTom leads the European market, while Garmin leads in the United States, both with around a 50% share in their strongest markets. This remains true, although Garmin retains a close second position behind TomTom in Europe, and a February 2008 ChangeWave survey showed that the closest rival to Garmin's 56% U.S. market share is actually Magellan with 12%, TomTom hovered somewhere around only 8%.

Though Garmin has not yet posted its earnings -- it does so on April 30 -- a Reuters report quoted a company executive anticipating a 40-50% drop in its first quarter revenue as well. That company's stocks have dropped almost 60% from their 52-week high.

The study "World GPS Market Forecast to 2012," says that at the end of 2007, 90% of GPS devices sold were PNDs. Including holiday sales, 33.9 million units were sold, against 11.9 million of the prior year. A softening of the market after such a surge indicates market saturation. Furthermore, the overall drop in the selling price of PNDs has significantly lowered their profit margin. Garmin's CFO actually predicted another 20% drop in its devices' selling price for 2008.

The study expects GPS-enabled cellular handsets will usurp the majority share presently held by PNDs, reaching as high as 78% by 2012. With the cost of many consumer GPS receivers at under $10 , and the growth of location-based rich applications, some anticipate GPS will be a standard option like Wi-Fi and Bluetooth in many devices.