Apple Inc. (AAPL) has ditched Google Maps and forged a deal with navigation system maker TomTom NV (TOM2.AE) for mapping services in the next version of the software powering its iPhones and iPads.

The pact between the Dutch minnow and one the world's most famous brands was made public just hours after the Cupertino, California-based company unveiled new mapping features for its upcoming new phone operating system at its developer conference in San Francisco.

Little detail was provided in TomTom's two-paragraph press release announcing the agreement Tuesday, but the deal could be an important life-line for the Dutch navigation system maker which has seen its revenues ebbing over the past four years.

The Amsterdam-based company has been trying to reposition itself as a mapping-software and services provider as demand for its core product -- portable satellite-navigation devices -- is undermined by the rising popularity of smartphones which have inbuilt navigation tools free of charge.

Google has dominated smartphone navigation until now. Its Google Maps software runs on its own Android operating system for mobile phones and on the current version of Apple's iOS. TomTom provides maps for Google, but the deal, forged four years ago, runs out in a year's time as the Mountain View, California-based company is building up its own map base. Navteq, another major mapping company, was bought by cellphone maker Nokia Corp. (NOK) four years ago in an estimated $8.1 billion deal.

Apple suppliers are routinely tight-lipped about their deals and a TomTom representative declined to detail the services TomTom will provide for Apple. Besides maps, however, TomTom also sells real-time traffic information, helping drivers to bypass congestion, and warns on speed cameras.

TomTom already has mobile navigation apps that run on Apple's iPhone and iPads selling for between EUR40 and EUR80, depending on the country, and it charges another EUR29 a year for real-time traffic information. But it also provides maps and related content to other smartphone makers like BlackBerry maker Research in Motion (RIMM), Taiwan's HTC Corp. (2498.TW) and Samsung Electronics Co Ltd (005930.SE) of South Korea.

TomTom worked on its deal with Apple for around a year, according to a company spokesman, who added that it won't affect the agreements with other smartphone makers.

The Apple deal will provide a "meaningful contribution" to TomTom's sales and profits, the spokesman said, without elaborating.

At the developer conference, Apple showed off a number of new software programs that as a whole underscore how the company is distancing itself from Google Inc (GOOG), previously a close partner but now a major rival in the smartphone market.

The new mobile operating system, iOS 6, will ship in the fall and comes with 200 new features, including the new maps service with turn-by-turn navigation; integration with Facebook, enhancements to "voice assistant" Siri, and a "Do Not Disturb" feature to avoid unwanted messages at night.

TomTom started to produce in-car satellite navigation devices in 2004, but the market peaked at the end of 2008 in Europe and a year later in the U.S. Since then, TomTom's revenue has been steadily declining, from EUR1.67 billion in 2008 to EUR1.27 billion in 2011.

In the three months to March, the latest figures available, the market for personal navigation devices in Europe was down to 2 million units from 2.4 million a year earlier, TomTom said, while the North American market shrank to 1.4 million units from 2.1 million units.

TomTom's Chief Executive Harold Goddijn said in a recent interview with the Wall Street Journal that satnavs contribute 35% of the company's overall sales.

"The deal with Apple is a boost for TomTom because of the huge installed base of Apple product users and because of the brand and all that it stands for: innovation, ease of use and quality," SNS Securities analyst Martijn den Drijver said.

However, den Drijver cautioned that the financial implications are less clear, as the deal could hurt sales of TomTom's navigation application in Apple's iTunes store as well as eating into PND sales.

At 1225 GMT, TomTom shares were trading 12.2% higher at EUR3.67. The shares have lost roughly a third of their value over the past 52 weeks, on weak sales in a tough economic environment with consumers cutting back spending on consumer electronics.

Maarten van Tartwijk, Jessica E. Vascellaro and ian Sherr contributed to this article

Write to Archibald Preuschat at archibald.preuschat@dowjones.com

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