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Garmin cuts losses, formally quits smartphones

updated 08:10 pm EDT, Wed November 3, 2010

Garmin Q3 marks exit from smartphone business

Garmin while discussing its summer fiscal results today confirmed that it was quitting the smartphone business. The company decided after considering its position that it "cannot reach the scale necessary" to compete with others in smartphones and was shutting down its efforts. Staff involved in research and development would be moved to the in-car GPS team and other areas where the company was still growing, it said.

The navigation pioneer also reiterated its plans to develop mobile apps, which should now include BlackBerry and iPhone apps. Android GPS is still in development as well but will be an exclusive for ASUS' future phones.

Smartphones like the Garminfone were the primary liability for Garmin during the period. While its aviation, marine and outdoor GPS units grew, the automotive and mobile section saw its revenue drop 19 percent and dragged the company's total revenue down 11 percent from a year ago to $692 million. Garmin had previously admitted that its partnership with ASUS had only mustered $27 million in revenue since it began; Apple by comparison generated $8.82 billion in iPhone revenue just in the summer.

The departure closes a short-lived ambition of Garmin's to try and challenge the iPhone. When it unveiled the nuvifone in January 2008, Garmin had positioned it as a full rival to the iPhone and intended to beat Apple to having a GPS-aware device. Repeated delays meant it didn't ship to AT&T until late 2009 and let Apple not only add GPS but refine the experience until it could largely match what Garmin promised. Shortly after the iPhone 3GS launch, rivals like TomTom already had dedicated iPhone GPS apps.

Android also likely contributed to the premature end. Google Maps Navigation's debut on the Motorola Droid in November 2009 gave Americans turn-by-turn phone navigation for free and with features that weren't present even on Garmin's best GPS units, like Street View. Garmin and ASUS had already moved to Android quickly, but the custom-written GPS software had lost much of its advantage.




by MacNN Staff

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