If you're using a smartwatch for swimming or endurance sports, you're probably familiar with Garmin's GPS watches. Image: Garmin.

A lot of companies are trying to make their way into the popular activity band/smartwatch category. Most notably, Fitbit (FIT) has become a category-defining brand, and Apple's (AAPL 0.02%) Apple Watch brought an innovative interface and calling capabilities to a capable activity tracker.

One company that isn't fretting the emergence of Fitbit or the Apple Watch is Garmin (GRMN 0.56%), which may be known for car navigation systems, but has built an impressive watch business right under our noses. 

Image: Garmin.

A category by itself
I'll be honest that I thought Garmin was a dying company until I decided to sign up for a triathlon last year. When you start looking for a durable watch that has GPS for running and biking, that can go in the pool, and monitors your heart rate, the number of options are limited. Fitbit doesn't have a product that checks all of those boxes, and only TomTom and Polar really compete in that specialty market.

If you go to an endurance event like a marathon or a triathlon, you quickly see that Garmin pretty much owns the demanding endurance-sports market. Even if the Apple Watch is a success, it won't dampen the need for those products.

Why Garmin doesn't fear the Apple Watch
There's no question that the Apple Watch has a lot of functionality that's important to athletes, but it's never going to be a great stand-alone sports watch. The watch still needs to be tethered to an iPhone, and who wants to run a marathon with an iPhone in your pocket?

Even if the tethering aspect changes, and the Apple Watch has more independent functionality, it likely won't ever have the combination of GPS, battery life, and durability that athletes need. The sheer size of the battery currently needed for an endurance athlete smartwatch is enough to scare off Apple, and building devices designed to withstand the torture of a race isn't Apple's goal in the watch business.

That leaves Garmin to build on its own little niche in the watch market, out of Apple's mass-market audience.

Garmin has its limitations
This isn't to say that Garmin isn't without its own limitations. The company hasn't built a very attractive app, and doesn't integrate well with other platforms, like Apple's activity app. This leaves many athletes (including myself) running with two watches, wishing that there were a better way.

Using Garmin's full capabilities to get text messages or emails can also drain the battery life, making it a questionable choice as an everyday watch. For now, that leaves Garmin in a very niche, but very lucrative, part of the smartwatch market.

Value for investors
I've focused today on just one part of Garmin's overall business, but it's a key component. In the third quarter of 2015, fitness revenue grew 23%, to $143 million, and was the only segment that grew in the quarter. 

Image: Garmin.

Not surprisingly, auto GPS sales fell 14%, to $265 million, while outdoor and aviation sales dropped 5%. The fitness business is a bright spot for Garmin, and it may be a niche the company can play in for a long time.

For investors, the value isn't bad, either. Shares trade at 12 times trailing earnings, and the stock yields 5.9% from its dividend. Parts of Garmin's business may be in decline, but the fitness business is picking up the slack. With Apple unlikely to be a major competitor anytime soon, I think Garmin's future is looking bright.