Garmin's Last Gasp?

• Report this Comment On May 27, 2010, at 3:31 PM, electronhauler wrote:

  Yes, Garmin seems to be in bad shape vis-a-vis the consumer navigation market.... very similar to RIMM whose goose is cooked because of the Iphone and Android. Although Garmin still has an avionics business that will sustain a much smaller version of the present company.

• Report this Comment On May 27, 2010, at 3:43 PM, EnigmaDude wrote:

  Garmin is far more diversified as a company than most people (including the author!) seem to understand. The consumer GPS devices are just one part of their business. The latest entry of a smartphone device (Garminfone) will not in itself determine the fate of the business. It's a new product offering and it may pan out or it may not. But it certainly is not their "last gasp".

  They still have their marine products, aviation products, map offerings, and OEM solutions to name just a few. They have been innovators for more than 20 years and I doubt that they are out of ideas after this latest one!

• Report this Comment On May 27, 2010, at 6:12 PM, herbfar wrote:

  They still make a fine GPS device. Nothing better in a car. Don't count them out too soon.

• Report this Comment On May 27, 2010, at 6:40 PM, RDMiller wrote:

  Hi... it is a shame that Garmin wants to sell map upgrades to loyal customers for the price of a competitors NEW unit. Just another reason to switch.

  Use some common sense and either offer new maps for free or at a reasonable cost for an inter-net download. Your out of pocket cost is MINIMAL.

  A satisfied customer who perceives he/she is important will spread good words - dissatisfied owners switch and take future business with them... this is not a 'new' marketing fact.

• Report this Comment On May 27, 2010, at 7:20 PM, bghouse wrote:

  Garmin owns several niche markets with purpose built tools. I own two Garmin devices, one for the trail, and one for the car. And, I own a few shares ... I couldn't imagine replacing either device I own with a smart phone. The devices they make for athletes are very cool. Avionics, boating ... I'm not sure any smart phone replaces any of those functions very well.

• Report this Comment On May 27, 2010, at 10:37 PM, gmapper wrote:

  Looks like you need to do a bit more homework. Garmin was close to a billion dollars a year in sales before there was even much of a market for portable GPS navigators for cars. They are generating tons of cash every quarter and are not anywhere near looking for a buyer. Success in the smart phone market would be a big plus for future growth in the current economy, but it isn't a requirement for Garmin to prosper in the long-term. Garmin is extremely lean and well-managed. I know several of their engineers and executives personally, and I wouldn't bet against those guys. They are too smart to go away easily.

• Report this Comment On May 28, 2010, at 12:16 AM, mpapile wrote:

  Yes Garmin does have other business than personal navigation (which is totally going to die by the way), and they are certainly not going to go under. However their valuation will have to drop based on the loss of a major part of their business

• Report this Comment On May 28, 2010, at 6:36 AM, wobatus wrote:

  Mpapile, their valuation doesn't necessarily have to drop, since this is mostly factored in. GRMN trades at 5x enterprise value to free cash flow. So, if half its free cash flow goes away, it's trading at 10x, which is a 10% fcf yield.

• Report this Comment On May 28, 2010, at 11:22 AM, TMFMarlowe wrote:

  bghouse, try Navionics' iPhone app sometime when you're out on your boat. Does almost everything the Garmin does and costs a whole lot less.

  That's not a realistic alternative in commercial applications, obviously, but for near-shore pleasure boating it works just fine.

  John Rosevear

• Report this Comment On May 28, 2010, at 5:49 PM, PnutbuttrNJelly wrote:

  Wow - haven't heard all this before - wait - maybe - yes I have - only over and over for the last 2 years. I believe there are many like me who will never pay the monthly subscription fees for a smartphone, at least not when I can have my simple basic phone and one of the new Garmin gps models that have wi-fi, built in browser, geotagged camera, etc... I get my phone, and by just stopping in at the nearest starbucks, McD's, etc.. I have my email, browser, geotagged camera, and fun applications for a one time fee that will be less than half of a yearly smartphone subscription. Garmin has forcasted approx. $3 per share this year, have no debt, 1.3 Billion (that's Billion with a B) in the bank. Don't count them out yet. What about the new GPS satellites and the additional capabilites (2 way satellite communication, etc...). How about doing some research and give us some real information instead of spouting the same old garbage about the 'demise of Garmin' at the hands of the smartphone.

• Report this Comment On May 29, 2010, at 1:34 PM, Mooney231 wrote:

  Right on EnigmaDude and PBnJ!

  I won't drone on about how my plane has a panel full of Garmin avionics, the technical capabilities of Garmin's technology, the role of Min Cao in the development of the GPS system, and the future potential of GPS technology in general (say, fully automated point-to-point driving for cars). I'll just lay out the PND component of total sales from Q1 2010:

  Auto 51%

  Outdoor 24%

  Marine 10%

  Aviation 15%

  Garmin has been morphing it's product mix away from PNDs at a rate of 7% per quarter for the past several quarters. At this rate, it will be less than half of total revenue for Q2. Furthermore, the Outdoor segment is it's fastest growing component, and has the fattest margins of all segments at 28%. And none of this even takes into account 1$ of smartphone revenue.

• Report this Comment On June 01, 2010, at 8:48 PM, Walleyehunter wrote:

  The doom and gloom forecast for Garmin has been around for years. No debt, incredible cash flow, low P/E, good dividends, tons of money spent on R&D and diversified product base works for me.

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