Garmin may consider dumping mobile phone biz

Garmin will consider over the next few quarters whether it will stay in the mobile phone business, and could dump the unit if sales do not meet expectations, a key company executive said.

T-Mobile USA currently sells the Garminfone.In an interview with Reuters, Garmin CFO Kevin Rauckman said the company's smartphone sales have so far failed to meet expectations; the company had smartphone sales of $27 million in the second quarter. 

"We're pragmatic," Rauckman told Reuters. "If we end up ultimately not successful with units ... we'll have to sit back and evaluate that and consider making the best decision for our business. We'll have to make decisions within the next couple of quarters--whether we continue to invest or whether we pull back."

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 said in February that it was "disappointed" with sales of its first smartphone, the nuvifone, which AT&T Mobility sold (NYSE:T) in the United States.

T-Mobile USA launched the Android-powered Garminfone June 9 for for $199.99 with a two-year service contract and after a $50 rebate. The device is now selling for $99.99 on T-Mobile's website.

If Garmin does pull back from smartphones, it would not be the first company to retreat from the game. Modem maker Sierra Wireless introduced the Windows Mobile-powered Voq in 2003, but discontinued the effort in 2005 following sluggish sales.

For more:
- see this Reuters article

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