Rubens Morse

Garmin: Great Run, But Is That It?!

I think Garmin is a bargain at ~13x 2008 earnings and strong growth ahead. The bears are wrong saying that stand-alone GPS devices will be dead. The place you most need a GPS device is in the car, and I can't imagine people putting their iPhones or cell phones on the dashboard to use as GPS. PNDs are highly engineered products; to make a good one you need a combination of strong GPS reception, decent user interface, good display especially in daylight, good and accurate maps. Very few firms get it right: Garmin and TomTom do, Magellan doesn't. Garmin has a 50% market share in the U.S. but penetration of GPS PNDs is less than 10%, versus almost 20% in Europe. They should grow revenues more than 40% this year despite unit prices dropping 20%.