Garmin runs from crowded GPS market to new fitness focus

Garmin runs from crowded GPS market to new fitness focus

Summary: Certainly, no one is going to argue that GPS isn't needed these days. But it's a lot more than just little modules on a dashboard these days, and Garmin seems to be headed away from that direction.

SHARE:
TOPICS: Hardware, Google
6

Certainly, no one is going to argue that GPS isn't needed these days. But it's a lot more than just little modules on a dashboard these days, and Garmin seems to be headed away from that direction.

Speaking at the Bank of America Merrill Lynch Technology Conference on Thursday, Garmin CFO Kevin Rauckman noted that automobile GPS products previously accounted for 61 percent of Garmin's profits, but now it is down to 39 percent. However, outdoor fitness products with integrated GPS capabilities have moved up to fill the void (at least somewhat) as the company's largest contributor to operating income.

Yet, fitness GPS products aren't exactly mainstream and are still considered more of a splurge item than just new running shoes. Nevertheless, Rauckman seems determined that diversification is the key to Garmin's future success, and fitness products (particularly those for running and cycling) are going to be a big part of that:

We believe that we can continue to see the growth because it's still really early on as the leader in this space with GPS-enabled sport watches.

You know, we've sold a little over a million units, which is definitely not a mass market at this point. We expect, and there's been an announced competition that the Nike brand, the Nike TomTom watch that is now out on the market. But all the trends point to the fact that the first couple of years in the fitness market, we were predominantly going after the high-end triathlete marathon runner.

And we intentionally tried to deliver products and segment the market, so that we're hitting all aspects of the market. So we're not just hitting the high-end market -- high-end person that wants to spend $300 or $400. We now have units that are down at the $200 price point, which we believe has helped expand the market for Garmin. And we do expect that that could continue 25% over the next couple of years.

Naturally, Garmin will be throwing in a social networking aspect to its expanding fitness business called Garmin Connect, which will track the user's workout statistics online.

Based on the fact that fitness GPS products are helping keep Garmin afloat more than its traditional car accessories, then obviously the right move is to focus on where the money is.

Related coverage on ZDNet:

Topics: Hardware, Google

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

6 comments
Log in or register to join the discussion
  • Garmin Forerunner is a fantastic product

    I have a 310XT with heart monitor that I use for marathon training. The 610 series is impressive in its features. Good for Garmin, but it has plenty of strong competitors (not smart phones) in this space.
    Your Non Advocate
  • Moving forwards

    Fine, I'm happy with my investment in Garmin.

    There's masses of opportunity there, TomTom their big competitor seems to lack ideas people (the Nike Watch product was surely just an Apple metoo). Smartphones are a tradeoff in that market and so won't ultimately be the navigation device, Nokia's Ovi Maps offering is likely suffering with Nokia, hence to Garmin's gain.

    Yep, I'm happy with that.

    I might review it if Apple announced they were buying TomTom because then you'd have a serious ideas company coupled to a competitor that knows the market, but I don't think Apple has ever bought a major company so I think my money is safe.
    guihombre
  • no one is going to argue that GPS isnâ??t needed ?

    Really. And how exactly did I find my way to and from trailheads last weekend? Paper maps, that's how. Sure, I won't argue it would have been easier with GPS, and yes I will eventually buy one, but I navigate every day the old fashioned way. What worked before works now, if you take the time to learn where you are going.
    cwallen19803@...
    • It's not necessarily about finding where you are going

      @cwallen19803@...

      OK, now what was your heartrate? how fast were you hiking? what was the overall level of descent?

      Yes, you can go old-school and not bother to get metrics about your workout. Then again, there are many who value the data.
      Your Non Advocate
  • RE: Garmin runs from crowded GPS market to new fitness focus

    I'm a Garmin employee, so sure, I'm biased. But I was given a Forerunner 610 to test and after two days told the Fitness folks they were never going to get the watch back. It's become my everyday watch AND I use it to track my long distance walking. I like our other Fitness products, but the 610 is in a class by itself.
    TLMII
    • RE: Garmin runs from crowded GPS market to new fitness focus

      You need to participate in a contest for among the best blogs on the web. I'll recommend this website! <a href=http://gates-millenium-scholarship.com/>gates millenium</a>
      gates08