It looks like Garmin might be getting ready to release a way to add different map color themes to their devices. A recent file called “nuvi Map Theme Files” seen on this updates page is making a few people wonder if this will finally allow Nuvi owners to change colors on the map. Changing map colors is something Garmin owners ask about from time to time as it can be done on several competing brands. We’ll have an update to this post shortly…
UPDATE 4-Garmin profit misses estimates, shares tumble
* Q1 rev misses estimates* Q1 adj EPS $0.38 vs est $0.42
* Says to meet 2010 profit, sales outlook
* Shares fall as much as 15 percent
BANGALORE, May 5 (Reuters) - Garmin Ltd's (GRMN.O) quarterly profit came in well below Wall Street estimates, knocking its shares down as much as 15 percent as investors flagged a sharper-than-expected downward spiral in the portable navigation device market.
Garmin's results underscore the fact that PNDs, once one of the fastest-selling consumer electronics must-haves, are losing their battle with navigation-enabled smartphones, and retailers are struggling to push them off shelves.
In a statement, Chief Financial Officer Kevin Rauckman said top-line results for the first quarter reflect excess inventory at retailers in the PND category.
Revenue from Garmin's largest segment, automotive/mobile, fell 15 percent to $221 million.
"Portable navigation devices appear to be on their secular decline," Wedbush Securities analyst Scott Sutherland said. "The PND market is being squeezed by smartphone navigation and in-dash navigation."
In-dash navigation systems are pre-installed in cars and, in contrast to PNDs, they cannot be easily moved from one vehicle to another.
"The weak PND results will be seen as a vindication of the bear base on Garmin and as the latest sign that the category is slipping into irrelevance," said Oppenheimer analyst Yair Reiner in a note to clients.
Both Garmin and Dutch rival TomTom (TOM2.AS) have come under pressure since Google (GOOG.O) and Nokia (NOK1V.HE) started offering free turn-by-turn navigation on smartphones. [ID:nLDE60K06I]
To counter the smartphone threat, Garmin itself entered the intensely competitive market with its navigation-based nuvifone, trying to take on the likes of Nokia, Apple (AAPL.O), Research in Motion (RIM.TO)(RIMM.O) and Motorola (MOT.N).
But Garmin's results mark a departure from those of TomTom, which has responded by shifting its business mix toward high-margin, value-added services, making its PND for cars a smaller portion of total revenue. TomTom posted strong first-quarter results. [ID:nLDE63M23Q]
GROWTH BEYOND PNDS
The big question for Garmin is whether the company has enough drivers for its business beyond the mainstay PNDs.
Expectations are so low for its mobile phone venture, for which it has partnered with Taiwanese PC maker Asustek (2357.TW), that analysts don't see it disturbing the market share dynamics in the smartphone market.
Last month, the company joined hands with Deutsche Telekom (DTEGn.DE) unit T-Mobile USA to roll out a phone based on Google's Android operating system.
Garmin is looking to boost its marine business by targeting Raymarine (RAY.L) with a cash offer for the British marine navigation supplier that is valued at about $19 million.
Garmin is continuing to evaluate various acquisition opportunities in addition to Raymarine, CFO Rauckman said on a conference call with analysts.
The company said it expects to meet its previously given full-year earnings and revenue outlook.
But analysts cast doubt on the outlook reiteration.
"I think the company's going to have to do some work to explain how they're reiterating full-year guidance," MKM Partners analyst Pablo Perez-Fernandez said.
Garmin shares, which have risen about 18 percent in the past three months, were down 9 percent, or $3.26 to $34.22 in trading on Nasdaq. They touched a low of $31.99 earlier. (Reporting by S. John Tilak in Bangalore; Editing by Saumyadeb Chakrabarty)
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