Better late than never, Garmin
On Monday, the news began to filter out that Garmin is getting ready to call it quits on its failed attempt to challenge Apple
I choose door No. 2
Fools, you know I love Garmin. I watched in wonder as the company played rival TomTom like a fiddle a few years ago, maneuvering its Euro-rival into making an ill-considered, overpriced acquisition of mapmaker Tele Atlas, while Garmin chose a more malleable licensing deal from Nokia
Last month, Garmin CFO Kevin Rauckman basically admitted that Garmin may exit the cell phone business. Sales are not meeting expectations, and the company's flagship cell phone model in particular, the "Nuvifone" that Garmin began marketing through AT&T
Better sooner than later
And the quicker, the better. An unanticipated side-effect (that probably should have been anticipated) of competing with other smartphone makers is that potential licensees of Garmin GPS software such as Sony Ericsson and LG are now playing hard to get. Unhappy at the prospects of subsidizing a handset rival, they're opting to go with Garmin rivals such as Google
But this only makes Garmin's decision easier. On the one hand, anemic sales provide proof-positive that Garmin cannot compete with the big boys in the smartphone wars. On the other hand, a tactical retreat from hawking hardware may open up new possibilities for Garmin to seek out high-margin licensing revenue by placing its GPS software in the handsets of other manufacturers.
When a result is as clearly win-win as this one, there's only one smart decision for Garmin to make. Better late than never.
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