Garmin Gets into the Smartphone Game

Building up to Mobile World Congress (MWC) in Barcelona next week, several well known companies have been hinting about new smartphones offerings, each with a specific use case and no shortage of challenges to overcome.

Taiwanese PDA and computer-maker AsusTek Computer and personal navigation device (PND) company Garmin formally announced that the two companies will introduce a jointly branded line of smartphones, called Garmin-Asus nuvifone, the first of which will debut at MWC. Jonney Shih Chairmen of Asustek said that the Garmin-Asus phone will likely launch worldwide by next year and that the G60 will be announced at the Mobile World Congress in Barcelona. The MWC is already pegged to be the launch pad for both Dell and Acer’s additions to the smartphone family. Garmin-Asus will also compete against popular devices such as the iPhone and T-Mobile's G1 Android-based handset by specializing in location-based services (LBS), executives from both companies said.

The location-centric smartphone could hypothetically take the place of a traditional PND and is optimized for communication and navigation. The first nuvifone also will feature Ciao, a social networking application that combines location-based social networks in the device and the same turn-by-turn, voice-prompted navigation as Garmin’s PNDs. It comes preloaded with maps and points of interest that are searchable by category, establishment name or destination.

In expanding beyond its core competency, Garmin will be hard-pressed to find distribution channels or carrier partners, said Neil Mawston, director of global wireless practice for Strategy Analytics. The brand is not associated with mobile devices, and it already attempted its first nuvifone device back in early 2008 with very little uptake. Teaming with Asus is a step in the right direction, but Mawston said they are far from success.

“Garmin is one of the world’s biggest players in [PND] and has a good reputation,” Mawston said. “If they were to come along with a good set of apps and a store that goes with it and prove to carriers there is a potential to grow revenue through new services like social location — if they could prove there is potential to raise ARPU — there is definitely potential to work with big players. But at the present time, you struggle to see how they are standing apart from the competition. They don’t have the brand strength, the brand isn’t exciting, and the services don’t stand out — they are good rather than great.”

Personal navigation, along with gaming devices, is a segment that many analysts believe would make prime candidates for app-specific mobile Internet devices (MIDs), pocketable computers optimized around mobile Web browsing. But the segment is still a few years off as vendors focus on the netbook and smartphone category.