Why is it a turkey? The smartphone partnership between Garmin and Asustek Computer--Garmin-Asus--went from bad to worse as the year progressed. In February, Garmin said that it was "disappointed" with sales of its nuvifone products, but that it was hopeful for the rest of the first half of the year.
In June, T-Mobile USA began selling Garmin's first Android-powered smartphone--branded as the Garminfone. The smartphone sold for $199.99 after a $50 rebate and with a two-year service contract. However, by early July, the carrier cut the price down to $129.
Then, in September, Garmin CFO Kevin Rauckman said the company would consider over the next few quarters whether it wanted to stay in the mobile phone business. He said the company's smartphone sales had so far failed to meet expectations; the company had smartphone sales of $27 million in the second quarter.
In late October, the rumor mill started churning that Garmin and Asus would end their smartphone partnership in January, after nearly two years of collaboration. Days after the rumors appeared, Asustek confirmed the breakup. The two companies decided to stop introducing new co-branded devices moving forward, but said they would continue to sell and support the six handsets rolled out since the two firms entered into their strategic alliance in February 2009. Asus also said it would continue to design and produce new devices that will preload Garmin navigation and location-based services.
Garmin's whole value proposition in the smartphone market was undermined by companies like Google and Nokia (NYSE:NOK), which both offer free navigation software for smartphones. In the end, Garmin's premium navigation services couldn't push its phones through the pack.