Analyst: T-Mobile struggling to sell Garminfone

T-Mobile USA is having trouble locating customers who want to buy its Garminfone device, according to a research note from an analyst.

T-Mobile Garminfone garminOppenheimer analyst Yair Reiner conducted retail checks at 50 T-Mobile stores and found sales of the device, which launched June 9, were disappointing. Reiner estimated T-Mobile has sold around 20,000 Garminfone units so far. The carrier is selling the phone, which runs Google's Android platform, for $199.99 with a two-year service contract and after a $50 rebate.

"Before the product launched, many sales associates spoke with enthusiasm about the device, stating it had by far the best navigation functionality of any mobile phone," Reiner said in his research note. "However, even several days after release, many stores had not yet put the handset out on display, which was probably not very beneficial for sales. Others had not sold any despite displays being set up and several sold a few (less than 5). As of the beginning of this week stores have yet to show any meaningful sales numbers with maybe five sold on average per store since launch."

A T-Mobile spokeswoman said that beginning July 7, T-Mobile will be offering the Garminfone for $129 after $50 mail-in rebate with a two-year contract.

Garmin has been trying to establish a foothold in the smartphone market--which is widely expected to overtake the market for personal navigation devices --through its partnership with computer maker Asus. However, the location-services company has had difficulty addressing threats by free navigation services like those provided by Google and others. Indeed, Garmin earlier this year said it was "disappointed" with sales of its first smartphone, the nuvifone, which AT&T Mobility sold (NYSE:T) in the United States.  

Shortly after the Garminfone went on sale, T-Mobile had a one-day Father's Day promotion during which it offered every handset in its lineup for free when customers signed up for a family plan.

For more:
- see this IntoMobile post
- see this Cellular-News post

Related Articles:
T-Mobile unveils free-phone promotion for Father's Day
T-Mobile's Garminfone coming June 9 for $199
T-Mobile slumps in Q1, loses 77,000 subscribers
Garmin's Android phone headed to T-Mobile USA
Garmin admits nuvifone a 'disappointment'

Correction, July 6, 2010: Yair Reiner is an analyst at Oppenheimer, not at Morgan Keegan, as this article had originally stated.

Article update July 7 with new Garminfone pricing from T-Mobile.