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Garmin Further Delays Nuvifone

Olathe, Kansas —Garmin will again delay the launch of its nuvifone GPS/smartphones to the second half of the year, it said during a conference call with analysts May 6.

Garmin president and COO Cliff Pemble said, “Smartphones are complicated and bringing one to market that’s built totally from the ground up on a custom Linux platform is not an easy task.” The company said it is in the testing phase of the certification process and said cellphone carriers remain very interested in the product.

Garmin originally planned to launch a nuvifone in the third quarter 2008 and then more recently slated shipment of a consumer aimed Linux-based G60 nuvifone in the first half under a partnership with Asus, followed in the second half by an M20 device aimed at mobile professionals running Windows Mobile 6.1 Professional, also under the Garmin-Asus partnership

When asked if the future of Garmin is chiefly in smartphones or personal navigation devices (PNDs), Garmin responded its future will depend on a three pronged approach in the automobile/mobile sector including smartphones, PNDs and OEM sales.

Also during the conference call on first quarter earnings, the company said North American PND sales to consumers were up for the first quarter by 20 percent and that analysts expect sales for the year to increased 18 to 20 percent. By contrast Garmin’s sales to its retailers were down five percent in units for the first quarter ended March 28, compared to the year ago period as retailers were overstocked.

Unit sales in low end PNDs accounted for 85 percent of Garmin’s PND sales compared to 80 percent for the quarter a year ago.   The low end also represented 80 percent of revenue compared to 70 percent for the year ago quarter.

Garmin said it expects PND average selling prices (ASPs) for the full year to fall below last year by 15 percent, although first quarter ASPs were down more dramatically.

Garmin also noted during the call that Best Buy is its largest PND customer, accounting for 10 percent of sales.