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SiRF Rides the GPS Boom By Bill Alpert

Highlighted companies: Garmin (GRMN), SiRF Technology (SIRF)
Summary: Global Positioning System [GPS] stocks rode a doubling of unit sales to big gains this year: market leader Garmin is up over 40% YTD while Amsterdam-listed TomTom rose 69% from January at one stage in 2006. San Jose-based SiRF Technology supplies chips to the industry and should see 50% revenue growth for the year. The volatile stock currently trades at 27x next year's earnings. The company has to date seen practically no competition in the navigation device market and has made significant inroads to the wireless handset market with growing sales to Research in Motion and Motorola. In wireless handsets, though, there are two competitors of note: Qualcomm bundles its own GPS functionality into some of the chips it sells the handset makers, and privately-held Global Locate has a one-chip solution that may better SiRF's two-chip product. Global Locate has also set its sights on SiRF's core GPS device market.
Quick comment: Here's a former SIRF long who has soured on the company; Himanshu Pandya, on the other hand, concurs with Alpert on the company's bright prospects. Want insight on the GPS device market? No better source than Garmin's Q3 2006 earnings call transcript.

Source: SiRF Technology Aims to Beat Back Competition in Wireless GPS Chips