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Worldwide PND Sell-Through Off 5-10% In Q3: Garmin

Switzerland – Worldwide portable navigation device (PND) sell-through declined
5 percent to 10 percent in units during the third quarter and will probably
fall again at similar rates in the fourth quarter, given market saturation and
“substitute solutions” such as GPS-equipped smartphones, Garmin president/COO
Clifton Pemble said during an analysts’ conference call.

 About 30 percent of PND sales worldwide are
replacement sales, he noted in citing market maturity.

  The company, which leads in U.S. PND market
share, suffered a 19 percent third-quarter decline in its automotive/mobile
segment sales to $442 million, consisting mainly of PND sales. The segment’s
year-to-date sales fell 11 percent to $1.11 billion. The segment’s unit volume
and average selling prices (ASPs) also declined during the third quarter, said
Pemble, who described the ASP declines as “significant.”

 The automotive/mobile segment consists mainly
of PND sales but also includes sales of PND-equipped cellphones, which have been
discontinued, and sales of GPS technology for use in third-party aftermarket
and OEM in-dash navigation systems. OEM segment revenues rose at triple-digit
rates during the quarter, Pemble noted. Sales of the company’s PND-cellphones
came to only about $25 million worldwide since their launch last year.

 Despite the sales decline in the automotive/mobile
segment, the segment continued to post operating income, though it fell 58
percent to $66.6 million for the quarter and 36.6 percent for the year-to-date
to $172 million.

 The company’s other product segments include
aviation, marine and outdoor fitness products, and sales of all company
segments combined fell in the third quarter by 11 percent to $692 million and,
for the year to date, by 2 percent to $1.85 billion. Companywide operating
income slipped for the quarter and year-to-date, but net income rose during
both periods.

 In other comments during the conference call, Pemble
said Garmin left the PND phone market because “the smartphone market exploded …
beyond expectations.”