Garmin said smartphones equipped with navigation are finally causing a decline in sales of portable GPS devices and noted that its Garminfone is struggling.
Industry wide, portable navigation device (PND) sales are down 7 percent in North America, 9 percent in Europe and 5 percent worldwide this year compared to 2009, said the GPS maker.
As for the Garminfone, president and COO Cliff Pemble said, “Our T-Mobile sales are below our plan. We’re working aggressively with the carriers” on determining appropriate pricing and positioning. He noted that both the A50 and A10 overseas have received favorable reviews but said, “We recognize the hyper-competitive nature of the wireless industry. With this in mind, we’re focusing on fewer, more targeted projects. We continue to monitor sales at T-Mobile and other carriers.” To help sales, Garmin is sending out sales trainers to stores in North America. It said it is still committed to the smartphone category.
Overall, Garmin said its OEM business in automotive is growing and it hopes to grab more share in PNDs, especially among second-time buyers. Recently Garmin became a supplier for the Jeep Grand Cherokee for a premium in-car GPS system. Its fitness GPS products are in high growth mode and the company saw a solid quarter ending in June.
Revenue grew 9 percent and unit sales climbed 8 percent but net income declined to $135 million from $162 million for the year ago quarter.
Outdoor fitness climbed 32 percent, marine grew 23 percent and aviation eased up 1 percent to respective revenues of $143 million, $74 million and $65 million.
The auto/mobile sector gained 2 percent in revenue to $447 million. Volumes increased 4 percent for the quarter and PND pricing declined 6 percent over last year.
For the full year 2010, the company expects revenue of $2.8 to $3 billion and operating income of $675 million to $725 million.
Source: Garmin
