Garmin GPS Product Sales
Garmin Sells the Most Personal Navigation Devices in the World
Founded in 1989 and headquartered in a small Kansas city named Olathe, Garmin Ltd. makes and sells navigation, communication and information devices that engage Global Positioning System (GPS) technology.
GPS uses a constellation of 24 satellites that the U.S. Department of Defence maintains to:
- Locate a user’s position
- Display that position on an electronic map
- Provide computerized guidance to other locations.
Garmin generated US$3.18 billion in revenues during 2007 in part due to the introduction of 60 new products. North American sales were up 89%, while sales in Asia and Europe rose 66% and 63% respectively.
The company had 8,500 employees at the end of 2007, almost twice as many during the prior year.
Global Positioning System (GPS) Products
Garmin organizes its GPS products into four segments.
- Aviation (panel-mounted and portable systems for either the cockpit or air traffic control)
- Automotive and Mobile (navigation equipment in automobiles, motorcycles, laptops, smartphones and other handheld devices)
- Marine (electronic boat chartplotters, sonar units, fishfinders and autopilot systems)
- Outdoor and fitness (outdoor navigation and tracking devices for hikers, climbers, snowmobilers, soldiers and pet dog monitors as well as automated fitness training equipment).
Innovative products planned for this year include adding speech recognition capabilities to personal navigation devices. For example, users can say the words “Find Italian restaurant” into their unit, then speak their choice and the PND will lead right to that restaurant’s door. Also planned are bicycle computers with full colour display and bike-specific features.
Garmin First Quarter 2008 Sales by Region
For the first 3 months of 2008, overall company revenues were up 34.9% to US$663.8 million. Listed below is the performance of Garmin’s 3 geographic segments during first quarter 2008.
- North America … US$411,432 (62% of company revenues, up 27.5% from same quarter 2007)
- Europe, Africa and Middle East … $210,587 (31.7%, up 42.2%)
- Asia … $41,786 (6.3%, up 94.7%).
Garmin GPS Product Sales in Asia
While Asian operations had the highest percentage sales gain, distribution of Garmin technologies there are relatively small relative to overall company revenues.
The relatively small scale of Asian sales is at first surprising when one notes that 38.3% of Garmin operational assets are in Asia, notably Taiwan. Manufactured GPS products are shipped from Taiwan to clients in Europe, North America and Asia. Given the fast-rising price of oil and gas, distributing made-in-Taiwan Garmin products in Asia would seem more cost-effective.
However, company management has a history of establishing distribution channels in a given region and then buying the exclusive rights to those distributors. Last year, Garmin acquired and now owns GPS product distributors in key European countries namely Germany, France, Italy and Spain.
Garmin has yet to win a foothold among the leading distributors that could import a much higher volume of its products into Asia.
Garmin First Quarter 2008 Sales by Business Segment
Automotive and mobile revenues generate a significantly larger portion of company revenues. That percentage has expanded from 64.4% in the first quarter of 2007 to 68.1% in the first quarter of 2008.
- Automotive and Mobile … US $451,859 (68.1%, up 42.7%)
- Aviation … $85,445 (12.9%, up 18.7%)
- Outdoor/Fitness … $70,495 (10.6% of company revenues, up 16.5% from same quarter 2007)
- Marine … $56,006 (8.4%, up 30.2%).
In the first quarter of 2008, Garmin increased total unit sales by 80% to 2.79 million over the same period in 2007. Strong sales of automotive products provided the driving force for much of this percentage gain.
GPS Navigation Nüvi Devices
One of Garmin’s most popular products is its nüvi®, a sleek and slim portable device that easily goes from vehicle mode to pedestrian mode for exploration after the car is parked. The popularity of GPS navigation continues to grow as consumers embrace the technology that takes the guesswork out of driving, while offering new outdoor navigation opportunities around the world. To suit a wide range of lifestyles, Garmin launched 14 new nüvi models last year.
