After we’ve heard word that the Garmin smartphones weren’t selling well the company said in an interview that it will evaluate its phone business if things don’t pick up in the next few quarters.
The company is well known for its class of personal navigation devices but that market may be dwindling as convergence take over. I mean, who really wants a standalone personal navigation unit when your smartphone comes with free navigation services? Sure, a standalone device is generally better and doesn’t require a data connection but the smartphone navigation experience is good enough for most people.
Garmin smartly teamed with Asus to tackle the smartphone market and the companies will be releasing multiple Android phones. The first Garminfone for T-Mobile failed to excite and the company’s chief financial officer, Kevin Ruckman told Reuters that it is considering all options.
“We’re pragmatic … If we end up ultimately not successful with units … we’ll have to sit back and evaluate that and consider making the best decision for our business … We’ll have to make decisions within the next couple of quarters — whether we continue to invest or whether we pull back.”
If it jumps out of the smartphone market, Garmin has a few other options. It could try and maximize its revenues with existing customers by selling value-added services like live traffic or it could go the licensing route. Maybe it will have to make a bigger push with its app strategy in order to stay relevant.
Garmin, TomTom and other navigation makers will be facing stiff challenges in the future as smartphones are only expected to get “smarter” and the worldwide market is going to grow at an exorbitant pace. Some of these companies will inevitably go by the wayside but I am interested to see how the smart ones will adapt to this new future.