Rumor Mill: Garmin-Asus splitting up in January

Garmin and Asus will end their smartphone partnership, Garmin-Asus, in January after nearly two years of collaboration, according to multiple reports.

Garmin-Asus offers the Garminfone through T-Mobile USA.The reports, from the Chinese Economic Daily and Taiwan's Digitimes, said--without citing sources--that Asus will resume building its own branded handsets and Garmin will return to the personal navigation business. The two companies formed the partnership to build phones focused on location-based services, but sales have fallen flat.

Garmin representatives did not immediately respond to requests for comment.

A key Garmin executive said in September that the company would consider dumping the mobile phone business if sales did not meet expectations. Garmin CFO Kevin Rauckman said at the time that the company's smartphone sales had so far failed to meet expectations; the company had smartphone sales of $27 million in the second quarter, out of total revenue of $729 million. 

"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 $49.99 on T-Mobile's website.

For more:
- see this Engadget post
- see this Digitimes article

Related Articles:
Garmin may consider dumping mobile phone biz
Analyst: T-Mobile struggling to sell Garminfone
T-Mobile's Garminfone coming June 9 for $199
Garmin's Android phone headed to T-Mobile USA
Garmin admits nuvifone a 'disappointment'