Garmin Market Share - Will it be Sustained?
By William Trent, CFA of Stock Market Beat
One day after presenting the bullish case for Garmin (GRMN), BusinessWeek came across the same bearish data we did: namely that big competitors are entering the niche. However, their article contained some good nuggets about the overall market and the market share of the current leaders.
Analyst Ron Stearns of Frost and Sullivan in San Antonio pegged the automotive portion of the consumer GPS business at $922 million and reckons consumers will buy more than 1.2 million units this year. Add in outdoor units aimed at hikers and boaters and you hit more than 4 million units and $1.8 billion in sales. And both market segments are growing. By 2010, Stearns expects combined unit sales (both automotive and outdoor markets) of 8.3 million and $2.7 billion in revenue.But it’s a fluid market. Garmin, launched in 1989, was once an upstart seen invading the turf of Magellan, first in the recreational segments that it dominated and later in the automotive portion of the business.
Garmin is now the dominant player in the U.S. market with share just shy of 50%. But it has been fending off a new kid on the block, TomTom, whose name in Europe is practically synonymous with GPS receivers. TomTom controls more than half the market in Europe, and Garmin struggles with share of about 10% over there.
“I will confess I was among those concerned about this turning into a commodity business, especially when Sony came in,” says Rich Valera, analyst with Needham and Co. in New York. “But Sony’s product is really mediocre, and there’s nothing to really differentiate it from Garmin or TomTom or Magellan.” Sony’s Nav-u bears a resemblance to Garmin’s Nuvi and sells for about $549.
Yeah, Sony (SNE) has never taken over a consumer electronics niche by putting out a copy-cat product before, so don’t you worry about it.
http://www.stockmarketbeat.com/
One day after presenting the bullish case for Garmin (GRMN), BusinessWeek came across the same bearish data we did: namely that big competitors are entering the niche. However, their article contained some good nuggets about the overall market and the market share of the current leaders.
Analyst Ron Stearns of Frost and Sullivan in San Antonio pegged the automotive portion of the consumer GPS business at $922 million and reckons consumers will buy more than 1.2 million units this year. Add in outdoor units aimed at hikers and boaters and you hit more than 4 million units and $1.8 billion in sales. And both market segments are growing. By 2010, Stearns expects combined unit sales (both automotive and outdoor markets) of 8.3 million and $2.7 billion in revenue.But it’s a fluid market. Garmin, launched in 1989, was once an upstart seen invading the turf of Magellan, first in the recreational segments that it dominated and later in the automotive portion of the business.
Garmin is now the dominant player in the U.S. market with share just shy of 50%. But it has been fending off a new kid on the block, TomTom, whose name in Europe is practically synonymous with GPS receivers. TomTom controls more than half the market in Europe, and Garmin struggles with share of about 10% over there.
“I will confess I was among those concerned about this turning into a commodity business, especially when Sony came in,” says Rich Valera, analyst with Needham and Co. in New York. “But Sony’s product is really mediocre, and there’s nothing to really differentiate it from Garmin or TomTom or Magellan.” Sony’s Nav-u bears a resemblance to Garmin’s Nuvi and sells for about $549.
Yeah, Sony (SNE) has never taken over a consumer electronics niche by putting out a copy-cat product before, so don’t you worry about it.
http://www.stockmarketbeat.com/
posted by douglas mcintyre at 11:52 AM
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