Garmin (Nasdaq: GRMN) barked as loudly as it could this week, and not a soul was around to hear it.

The manufacturer of the once-hot navigation devices for automobiles announced that it was purchasing a rival German navigation company, Navigon, for an undisclosed amount. Navigon has downloadable applications in place on Apple's iPhone and Google's Android operating system, which should help generate a new revenue stream for Garmin. But is this really going to be enough to keep Garmin relevant?

Probably not.

The majority of Garmin's revenue is still derived from the highly competitive automotive GPS market. Revenue in this segment showed a year-over-year uptick in its most recent quarterly filing. That result was a surprise to many, including myself, but what came as no surprise was the 91% freefall in operating income. Overall operating margins also fell to 15% from 19%, while gross margins dove 700 basis points to 47%.

It's becoming apparent that with increased competition from Netherlands-based TomTom, and low-priced or free navigation applications being offered on smartphones from Apple, Android, and Research In Motion's (Nasdaq: RIMM) BlackBerry, that Garmin is going to turn to acquisitions to try to grow. The question is how many companies can Garmin buy if the revenue stream for the bread-and-butter portion of its business is contracting.

Since 2008, Garmin shareholders have suffered through a painfully slow series of product developments and a contracting revenue stream. Garmin is priced inexpensively compared with its peers, at only 14 times forward earnings, but consider that revenue has fallen for the past two years, and that analysts predict another two-year decline, and you can see why this one may not be done falling.

Garmin has been unable to differentiate to consumers why it's worth dropping potentially more than $100 on its automotive GPS devices when they could just as easily click a few buttons on their phones for free. This mentality has all the makings of slowly killing off Garmin's primary revenue stream and perhaps even choking off the company's only redeeming quality -- its dividend.

What do you think of the direction Garmin is headed? Share your ideas in the comments section below, and consider adding Garmin to your watchlist to keep up on the latest news in the navigation sector.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.