Garmin Delays Nuvifone

By Amy Gilroy -- TWICE, 7/30/2008

Olathe, Kan. — Garmin said it will delay the launch of its GPS/smartphone, called the nuvifone, until 2009 due to issues meeting carrier requirements.

The nuvifone was originally planned for the third quarter. The company expects it will resolve individual carrier’s technical requirements in both the United States and Europe to launch next year.

Today, in a conference call with analysts, Garmin VP engineering Cliff Pemble said, “When we announced the nuvifone it wasn’t clear what the carrier interest would be. We’ve been delighted with their response but transitioning the device from an open market design to one specific with carriers does require a lot more work in features …”
The company said it is internally targeting nuvifone sales of one million per year.

Garmin also said in its second quarter financial review that its PND shipments to North America were up 100 percent for the quarter from a year ago, but growth in the PND market is slowing compared to past years.

Pemble said, “The PND marketing is not growing as fast as in prior years, but it remains one of the fastest growing products in consumer electronics and we continue to see opportunities … as global markets expand … and as a replacement market begins.”

The company estimates consumers will seek to upgrade after owning a PND for two to four years.

While the company’s average selling prices (ASPs) are falling, they are falling less than analysts expected. Garmin said the PND average selling price for the second quarter was $233, down 8 percent from the first quarter’s ASP of $238, and down 20 percent from the second quarter a year ago. Garmin said it expects an ASP decline of about 20 percent during the Christmas season, with an ASP decline for the full year of about 25 percent.

Total

PND industry sales

grew by 313 percent from January through May last year in unit sales to consumers, according to the NPD Group.