Garmin’s Smartphone Strategy Has a GPS Twist

Garmin and ASUS are readying a new line of location-centric smartphones for launch this year, with the first set to debut at the Mobile World Congress conference in two weeks.

The news comes a month after Garmin (NASDAQ: GRMN) announced it is developing an Android-based smartphone, and a year after it announced the Nuviphone which has not arrived in market.

The two companies formed an alliance over a year ago to work on the Nuviphone. That delay, according to Garmin, was tied to establishing a carrier partnership. Garmin now plans to rebrand the Nuviphone as the Garmin-Asus nüvifone G60 and launch is set for mid year. Garmin did not return calls for comment by press time.

Smartphone vendors are looking to carve out feature niches to differentiate their products in what’s become a highly competitive market. There were currently over 150 smartphone brands worldwide with about 1,500 active models as of late 2008.

Apple’s hot-selling iPhone kicked off the feature race with its touch screen interface, which is fast-becoming a standard feature on new models from various smartphone providers, including Research in Motion, which has launched its first touch screen BlackBerry. Likewise, the popularity of Apple’s iTunes may be partly responsible for propelling Nokia’s (NYSE: NOK) music and video focus on its handsets.

For Garmin its niche is obviously location-based services (LSB), which is now catching fire with mobile device users who want such services to find people and places. Its smartphone portfolio will boast the same turn-by-turn, voice-prompted navigation features available on high-end Garmin portable navigation device (PND).

According to Canalys research Garmin held 35 percent of the worldwide PND market as of the third quarter of 2008, and 50 percent market share in the U.S.

Garmin said ASUS’s expertise with computing components and wireless applications is key to its smartphone plans. The Taiwan company’s products are used in a wide swath of computing devices including notebooks, PDAs, LCD monitors, wireless applications and 3G technologies. ASUS smartphone efforts have been focused strictly abroad to date, with device launches in Russia and eastern Europe.

Internet-enabled local search

Garmin’s new phones will feature preloaded maps and millions of points of interest that allow drivers to quickly find a specific street address, a company name or search for a destination by category. Users will be provided quick access to online points of interest through Internet enabled local search functionality, according to Garmin

But Garmin is also cognizant that smartphone users want much more than good location and search capabilities. Its smartphones will also feature Ciao!, a social networking application.

“We believe that converged devices are an emerging opportunity,” Dr. Min Kao, chairman and CEO of Garmin, said in a statement. The alliance effort over the past year, he said, has shown there is opportunity to expand Garmin’s product line and shorten product development time.

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