My opponent, Chuck Saletta, always brings up interesting and thought-provoking points when I duel with him, and so it is with Garmin
Then again, I disagree with Chuck that this is a sign of weakness for a company like Garmin. After all, if the GPS navigator market is still in its infancy as far as the mainstream consumer goes, that means many people (as opposed to early adopters) are just starting to realize that this is a thrilling, utilitarian product now available in a reasonable price range. Ads for the holiday season got the devices on shoppers' radar, and likely reminded them that such gadgets would make great gifts. (Few people need to be reminded about Apple's
Although Chuck is concerned about Garmin's lowered R&D spending, I can't help but wonder if Garmin can take a breather now that it has filled the pipeline with so many new products over the last year. Chuck's right, it can't rest on its laurels; but I'd say that with its array of products, it has aggressively positioned itself to appeal to customers of all stripes. And as Chuck pointed out, most new adopters will stick with their devices for a while.
The total market for portable navigation devices is expected to have at least doubled in 2006 and should continue strong growth this year as well; it seems clear that growth should continue well into the future. Why would anybody get lost or sit in traffic jams if they don't have to? Garmin's all set up to benefit greatly from consumers' awareness that there's an easier way to find their way around.
Garmin and Starbucks are both Motley Fool Stock Advisor recommendations. XM Satellite Radio is a former Rule Breakers pick.
Alyce Lomax owns shares of Starbucks, but none of the other companies mentioned; she recently bought a Garmin navigator to help with her not insignificant "getting lost" problem. The Fool has a disclosure policy.