Garmin made a splash last night and announced their new mobile phone. The nüvifone will feature a 3.5-inch touchscreen, internet browser, HSDPA support, Bluetooth, WiFi, camera, media player, and preloaded maps of North America and / or Europe. In addition, it houses “millions” of POIs, doles out turn-by-turn, and voice-prompted directions. Garmin has partnered with Google to integrate access to Local Search and Panoramio. But here’s the problem - the devices run Garmin’s proprietary PND OS.
As expected, there has been considerable confusion and ignorance coming from Street analysts and the media. No, this is not Garmin’s first foray into the mobile phone market (Garmin NavTalk) nor is it “the first time navigation and LBS have been put at the core of a wireless device” as an Oppenheimer note trumpeted (Nokia 6110 Navigator).
This strategy is hardly unexpected - GRMN has taken a ugly beating over the last three months because of the perceived threat of shrinking PND margins and increased competition from mobile phone manufacturers. Garmin knows they need to enter the market in a big way. But without the scale and distribution that device makers like Nokia and Samsung enjoy, does Garmin stand a chance? I think it’s likely that Apple, Nokia and HTC will eat Garmin for lunch. Keep your eyes peeled - nüvifone is expected in Q3.
