Garmin Profits Fall As Hardware Sales Suffer
Garmin continues to struggle after Q4 results revealed net profits falling to $129 million, down from $166 million during the same quarter 2011. The company has struggled to determine how it can compete in a GPS market that is now largely dominated by smartphone applications that provide free mapping and navigation apps.
According to the company’s financial report, Garmin witnessed a 25 percent drop in revenue in Q4 2012 throughout its vehicle-mounted GPS devices division. That sector of the business accounts for more than 50 percent of Garmin’s overall profits.
Garmin’s aviation and outdoor divisions witnessed a two-percent decline in sales. The company’s marine product sales fell by nine percent.
Garmin several years ago attempted to build its own smartphones with GPS capabilities but ultimately dated mobile OS installs and less than stellar smartphone hardware pushed the company out of the market. Later on, the company announced iOS and Android mapping options.
The GPS manufacturer watched profits and sales literally plummet overnight after Google Maps released free-to-use mapping software for mobile OS-based smartphones.
Even today, the Garmin USA app comes at an iOS cost of $50 with traffic data costing an additional $20. The Garmin app has also received a less than stellar 2.5-star average rating with more than 100 reviews via the Apple Apps Store. Google Maps and its free traffic option has more than 26,000 reviews with a 4.5-star average rating.
Garmin has managed to increase profits in its fitness products division; however, that division only provided $104 million for Q4, 2012.
Garmin in recent years has continued to focus on fitness based products as a way to offset the advances in mobile technology. Garmin’s GPS-enabled wristwatches and other fitness devices have quickly become favorites among many athletes around the world.