In a blog posting Jason asks what he is missing regarding Garmin. My answer is that he is missing nothing! This is one those stocks where I was burnt because I jumped in too earlier (still long and will wait this storm out). BUT my basic premise of GPS which I have commented on many times stays.
So why is Garmin down? Because they missed by a bit! The real problem with Garmin is their short interest. Garmin has been on the RegSHO list for 60 days and is naked shorted to the hilt! (Hey SEC you are doing fine, but wake up and start handing out fines!) Garmin has 10 days of volume in short interest. It is absolutely insane!
Is Garmin in trouble? Are GPS devices in trouble? Well if you followed the freaks from the iPhone world you would think that the iPhone could make your coffee as well. Well, folks the iPhone is not allowed to do turn by turn navigation. Part of this has to do with how the maps are licensed and part of it software. Navigation turn by turn software is hard to do right. This is the domain for companies like TomTom and Garmin.
Until last Friday I was fairly pessimistic on how I seemed to be the lone voice in the GPS jungle. But something changed my tune. One of my tactics is to cruise the stores and talk to shoppers. On Friday I headed over towards Media Markt (European Best Buy equivalent). What I saw amazed me. Garmin has been buying their distributors and many questioned why. On Friday I saw why. Garmin is now negotiating directly with Media Market and negotiating for prime access. The result is that people are buying up 4.3 inch devices from Garmin! It seems that the sales staff has been trained towards selling and explaining Garmin devices here in Europe. Its working as the clients are buying the new 4.3 devices that are very portable. Want to know what is a desired feature with your GPS device? MP3 player! How is TomTom faring? I think fine. I also saw that the GPS inventories have finally been brought down to fairly low levels as the inventory in Media Markt has been at one of the lowest points in a couple of years.
Are cell phones a threat to GPS devices? No, not a chance because I see consumers who want 4.3 inch screens and small cell phones. The two do not go together. What I do see is the need for a pedestrian GPS device and there cell phones will rule. Nokia will be the dominate force with their new Nokia Map 2.0 release. The new generation of GPS devices have the ability to be a pedestrian device, but I am doubtful that they can evolve into anything beyond a niche.
So Jason you are not missing anything. You are just smarter than me waiting till now!