Time to Sell Garmin (GRMN) and Get Android (GOOG)?
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Is Google's (Nasdaq: GOOG) Android really killing Garmin (Nasdaq: GRMN)?
Seems like a logical argument. Smartphones now have the capability to lead you to your destination and avoid costly tie-ups with traffic, all while doing it from the same device you make calls and play Angry Birds on.
One blog recently highlighted that Google's Android now has real-time traffic mapping, drawing on data from U.S. Dept. of Transportation sensors, and other Android users, to give you a better picture of your impending delay or potential skirting of doom.
However, Garmin also offers up something similar in their 2460LMT, which uses Nokia's (NYSE: NOK) Navteq maps service. Other GPS devices utilize Sirius XM's (Nasdaq: SIRI) XM Traffic, which costs from $9.99 to $3.99 per month depending on if you're already a subscriber or not.
The blog also argues that Garmin's devices generally will set you back an additional $50 for the addition of the Nokia service. But data plans on major carriers for smartphones and other mobile devices can set you back $10 - $30 per month, depending on your usage.
But phone-based navigation isn't new technology. Garmin currently has a solid revenue base in aviation, marine, and fitness, which saw growth in all segments last quarter. Shares have actually gained over 30% from lows reached last August, even with recent earnings disappointments.
The stock, just above $34 per share, is trading at about the same level it was one year ago, falling short of the S&P 500s gains over the same period (15%).
GRMN carries a 12.3% short interest of all outstanding common.
Investors take note though, management, as of last quarter, predicted FY11 EPS of $2.25 - $2.50 and revs of $2.4 - $2.5 billion, missing the consensus EPS of $2.57 and revs of $2.54 billion at the time. Gross margins are also expected to be flat in FY11. Even with contracts at Honda (NYSE: HMC) and Ford (NYSE: F), auto revs last quarter declined 31%. North America, its largest market, saw revs fall 30% from $768 million to $537 million. A 46% increase in Asia revs to $66 million may not be enough to bolster the company without further consolidation or innovation.
GRMN shares are up modestly ahead of the opening bell today.
Seems like a logical argument. Smartphones now have the capability to lead you to your destination and avoid costly tie-ups with traffic, all while doing it from the same device you make calls and play Angry Birds on.
One blog recently highlighted that Google's Android now has real-time traffic mapping, drawing on data from U.S. Dept. of Transportation sensors, and other Android users, to give you a better picture of your impending delay or potential skirting of doom.
However, Garmin also offers up something similar in their 2460LMT, which uses Nokia's (NYSE: NOK) Navteq maps service. Other GPS devices utilize Sirius XM's (Nasdaq: SIRI) XM Traffic, which costs from $9.99 to $3.99 per month depending on if you're already a subscriber or not.
The blog also argues that Garmin's devices generally will set you back an additional $50 for the addition of the Nokia service. But data plans on major carriers for smartphones and other mobile devices can set you back $10 - $30 per month, depending on your usage.
But phone-based navigation isn't new technology. Garmin currently has a solid revenue base in aviation, marine, and fitness, which saw growth in all segments last quarter. Shares have actually gained over 30% from lows reached last August, even with recent earnings disappointments.
The stock, just above $34 per share, is trading at about the same level it was one year ago, falling short of the S&P 500s gains over the same period (15%).
GRMN carries a 12.3% short interest of all outstanding common.
Investors take note though, management, as of last quarter, predicted FY11 EPS of $2.25 - $2.50 and revs of $2.4 - $2.5 billion, missing the consensus EPS of $2.57 and revs of $2.54 billion at the time. Gross margins are also expected to be flat in FY11. Even with contracts at Honda (NYSE: HMC) and Ford (NYSE: F), auto revs last quarter declined 31%. North America, its largest market, saw revs fall 30% from $768 million to $537 million. A 46% increase in Asia revs to $66 million may not be enough to bolster the company without further consolidation or innovation.
GRMN shares are up modestly ahead of the opening bell today.
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