Garmin revealed its third quarter, 2009 results today and shed light on what has evolved from a solid growth market into a fast-changing and challenging market for personal navigation device (PND) sales.
Garmin representatives identified strengths and soft spots in the publicly-held company's sales, and discussed Garmin's positioning in a future that includes smartphones with GPS, and "free" turn-by-turn navigation.
Garmin holds about 60 percent of the GPS market in the US, so it's not surprising that Garmin is synonymous with GPS navigation for many consumers. But Garmin is challenged to maintain that position of strength due to a weak economy and changing technology.
Garmin reported total revenue of $781 million for the quarter, down 10% from $870 million in the third quarter of 2008. Sales in the automotive and aviation segments decreased, but sales of fitness GPS devices, such as the Garmin Forerunner and Edge, increased 11 percent, a real bright spot for the company.
Some of the most interesting discussion in Garmin's earnings report conference call centered on the threat of the Android platform, and GPS navigation on smartphones in general. Garmin contends that there are still plenty of reasons to choose a dedicated PND (or its nuvifone, which acts like a dedicated PND when placed in its car mount) over a smartphone for in-car navigation. Reasons included maps in device memory (rather than maps downloaded on the fly which aren't available out of cell tower range); display size, usability in the vehicle (as opposed to trying to work a small, sensitive smartphone touchscreen while driving); and power supply/battery life issues. Garmin was also critical of quality of map data used by some smartphone GPS vendors. Dedicated PNDs still provide the "best navigation experience," Garmin reps said.
On the topic of smartphone sales, Garmin noted a price reduction for its G60 nuvifone (to $199 with contract). The company will be developing additional phones for release in 2010, including an Android OS phone. Interestingly, representatives said the company is not working on a standalone navigation app for a platform such as the Apple iPhone.
