Garmin May Exit Smartphone Business

Garmin is best known for their GPS systems that people buy and mount in their vehicles for getting around unfamiliar places. Few people know though that Garmin also makes smartphones. In a few months, they may drop out of that business.As far as I can tell, they only make one device right now, the Garminfone, and it is exclusive to T-Mobile in the US. That may be part of the problem since T-Mobile is one of the smaller of the top 4 in the US, vying for third place against Sprint. Both AT&T and Verizon are much larger. It isn't their only problem though. AT&T has the older Nuvifone and that wasn't burning up the sales charts either.

Garmin has really taken their GPS strengths and wrapped a phone around it. A few years ago that may have been acceptable, but today, almost all smartphones have a GPS radio and access to mapping and location software that is good enough to get you where you need to go. In fact, some of that mapping software is by Garmin themselves.

The Nuvifone launched last year was a disappointment. The recently released Garminfone is based on Android but it doesn't have anything that really stands out that makes it a must have device.

The Chief Financial Officer Kevin Rauckman of Garmin on Monday told Reuters that they have only sold $27 million dollars worth of smartphones in the second quarter of 2010. That is a tiny fraction of what the iPhone or Android devices. They are prepared to exit the business in the next two quarters if they don't see signs of change.

The only change I can see them making that would work is to go up against devices like the Droid head to head in advertising, but that just isn't the market Garmin has been competing in.