Garmin Tries Again With Android Smartphone

GPS device giant Garmin is developing an Android-based smartphone for debut in 2009, but analysts said the newcomer faces several challenges in staking a claim in the competitive marketplace.

The Android announcement yesterday is Garmin’s (NASDAQ: GRMN) second phone development effort. It announced its first device, the Nuviphone, back in January — but that product has yet to hit the market.

The news comes as the smartphone space continues to see white-hot competition and is largely dominated by two names: Apple’s iPhone and Research in Motion’s BlackBerry line. Yet despite the competition and a depressed economy that is hurting other technology segments, most handset makers and wireless carriers are all enjoying strong revenue, thanks to growing device adoption and Net access plans.

A ChangeWave survey this week reported that it found 12.2 percent of mobile phone owners plan on buying a smartphone during the next 90 days, a jump of 0.3 percent compared to its September survey. Meanwhile, an IDC study found that smartphone growth will be 8.9 percent in 2009.

Cashing in such trends is the reason why vendors are pushing new products, applications and services into market at lightning speed. But the market trends don’t guarantee clear sailing, especially for new entrants, experts said.

And the list of new vendors aiming to push out Android phones next year is growing every month. Garmin was just one of 14 companies to have recently joined theOpen Handset Alliance, a Google-backed group overseeing Android development.

“Garmin will definitely be a niche player in a very crowded market,” Jack Gold, principal analyst at J. Gold Associates, told “It’s not enough to have a GPS-brand device. The fact that the second handset is Android is great, but with all the other smartphones out there, why would I buy it?”

Garmin declined to comment on further specifics about the Android handset or when the device might launch.

But it did shed some light on the delay of its Nuviphone, a touchscreen device that the company has described as offering what it called “a cutting-edge personal navigator” system.

According to the company, the Linux-based phone, initially slated to arrive mid-2008, became delayed due to a change in Garmin’s channel strategy.

“When we announced it, our strategy was to provide an unlocked device. But it got such carrier interest that we are working on a carrier partnership and integrating the requirements needed,” Jessica Myers, a Garmin spokesperson, told

Avi Greengart, research director of mobile devices for Current Analysis, noted that many smartphones already provide navigation applications and services — which is Garmin’s forte. Facing well-entrenched competition is just one of the market challenges facing the newcomer, he added.

“Many phones can do turn-by-turn navigation, and so Garmin’s first Nuviphone will have a tough time standing out,” Greengart told, adding that it lacks a lot of the other Internet and interactive features popularized by devices like the iPhone.

Likewise, the Garmin Android phone may have a tough time gaining traction, considering the number of competing handsets expected to debut around the same time, he said.

Garmin also has to come to grips with lessons from its Nuviphone development experience.

“It is crucial for Garmin to obtain subsidized carrier distribution,” Greengart said, noting that Nokia and Sony Ericsson have not had mainstream success selling unlocked phones. “Since navigation is a service that many carriers actually make money on, they may not want to subsidize and distribute a competitor.”

While Gold noted that Garmin has some advantages given its navigational expertise, he also predicts a rocky road ahead.

“They could play off their installed based of GPS devices in cars, but I would bet that the vast majority of people who already have a navigational device also already have a phone,” Gold said.

“The bottom line is Garmin is trying to prevent becoming irrelevant, as more [smartphones] add GPS capability,” he added. They are trying to strike back and branch out into phones. I don’t think they will be all that successful.”

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