Garmin Predicts Flat PND Sales

By Amy Gilroy -- TWICE, 2/23/2009

Olathe, Kan. — Garmin expects flat unit sales of personal navigation devices (PNDs) in 2009 with a decline in average selling prices for the category of less than 20 percent.

President/COO Cliff Pemble cautioned that 2009 will be a “difficult year,” but the company noted that big-box retailers are now beginning to place larger orders, having sold through excess inventory from last Christmas.

On an earnings call today with analysts, Garmin said it is happy with the shelf placement that PNDs will receive in retailer spring resets.

The company mapped out a PND strategy for the year that includes maintaining its market share in North America of about 50 percent and growing its share in overseas markets such as Asia.

During the fourth quarter, ended Dec. 27, 2008, Garmin said it wrote off $14 million due to Circuit City’s bankruptcy. It also said its Garmin-Asus Nuvifone, slated for release in the first half, is in the final phases of market entry. It expects that retailers will merchandise the Nuvifone with PNDs and also with phones.

Garmin said as more competitors are expected to exit the PND market this year, it believes declines in the average selling price of PNDs will moderate. But it noted that sales are now heavily skewed to the low end by a ratio of 85-to-15, with low-end PNDs defined as anything below a Nuvi 500-series model.