I have always been a fan of gadgets especially GPSs. To me it’s amazing that a tiny little device can help you navigate and knows exactly where you are all the time. GPS technology has been around for years and it wasn’t until the US government relaxed the requirements for consumer use that widespread use of GPS technology came to be. What a great opportunity at the time for companies like Garmin. All of the significant investment in satellite infrastructure was made and companies like Garmin were born to overlay mapping software, visualization and ease of use into a user-friendly device. They would make money on the device itself as well as the annual map updates which over a 2-3 year period of time could exceed the cost of the GPS itself. Life looked good. The technology was catching on and business was unstoppable. All was well until cellphone companies started to embed their own GPS SW into their phones and while the experience was a bit more primitive there was no need to buy the GPS and updates were free. Imagine embedded GPS technology into a device that was being subsidized by the cell phone carriers. Sounds impossible to compete against.
Well someone forgot to tell Garmin and not only did they not react as most companies would have – tighten down spending, R&D, advertising, and new product development, they did the opposite. In a funny sort of way I don’t think Garmin believed they were a GPS company. Instead they considered themselves a company that provided a varying number of products and services that help make an active lifestyle more impacting in addition to providing basic GPS technology. Their newer GPS products have lifetime maps and the user interface and experience is second to none. They have also addressed a number of other areas of opportunity including automotive technology, running, hiking, mountain biking, motorcycling, etc.
Garmin innovated and took the shift in their business climate and competition as a challenge. If you go to Garmin’s website here is what you see:
Hit the highways and never look back with our portable street navigators. There’s an easy-to-use navigator for any vehicle — and any budget.
Seamlessly integrate GPS with your mobile phone or laptop with our revolutionary GPS receivers and navigation software. Getting where you need to go has never been easier.
Find sweet motivation to get in shape and even surpass your fitness goals. Our small, highly-accurate fitness products help you keep track of your time, distance and speed for whatever sport moves you.
Hike, camp, hunt, explore and geocache with confidence. Our rugged, waterproof handhelds track exactly where you are and where you’re going — so you can focus on having fun.
Conquer the high seas or your local fishing spot with our marine line-up. From streamlined, highly-effective fishfinders to an entire plug-and-play marine network with sonar, radar and XM weather, we can outfit your rig.
Our industry-leading panel-mount and portable avionics are revolutionizing the world of flight. We offer pilots a wide range of VFR and IFR choices that add safety and convenience from takeoff to touchdown.
Adapt our GPS engines for your transportation, recreational or survey application. Our small, highly-accurate, robust devices offer superior performance and flexibility right off the shelf.
We now own 4 Garmin products and utilize a series of Garmin services. We own 2 Garmin GPSs for the car, 1 Garmin Edge bicycle computer, and 1 Garmin running watch. The 2 sport products are used with a Garmin service that allows us to track our performance and put plans in place for improvements. We can download and analyze results and create new courses. We can also see what other people are doing and get a sense for performance outside of our world. Garmin also has a sight for registered members that update total miles run and biked. It is extremely impressive and clearly being used by thousands of people. The heart of all of this is GPS technology yet the services and capabilities are far beyond basic GPS form and functionality.
Proofs in the Pudding…
TheStreet Ratings Top 10 Rating Changes 07/11/2011
Garmin (GRMN) has been upgraded by TheStreet Ratings from hold to buy. The company’s strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
All the time companies are assessing and reacting to news, trends, competition and the economy. Great companies anticipate and innovate. They take the tough news as a challenge. Garmin must have organized their people and partners to work through what was sure to have been a train wreck for them and created an environment of “healthy anxiety”. The team at Garmin must be very proud.