Garmin Not Doing as Well as Expected in the Phone Business

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Reuters interviewed with Garmin’s CFO, Kevin Rauckman, over the future of their phone unit. Rauckman stated that they will have to evaluate their smartphone unit in the next couple of quarters to decide whether to stay in or exit out. The sales for the T-Mobile Nuvifone have not met their sales expectations and they are looking at all options to remain viable in the industry.

If Garmin does decide to pull out, they might still be able to remain pertinent by making an app as TomTom has done with the iPhone. But even with that, stand-alone units are not selling like they used to now that phones have integrated features, like Google Navigation on Android. GPS units are unnecessary because no one wants to carry two devices, both of which can give directions with the exception being that Google Maps is free.

If Garmin wants to step up their game, they need to provide advanced location settings and update their hardware to keep up with the latest phones. If Garmin does not come up with a new strategy, their phone unit will fall out of popularity, and as smartphones become mini-computers, stand-alone GPS units will become extinct.