Garmin sees drop in margins, ‘nuvifone’ disappoints; shares fall

“No. 1 U.S. navigation device maker Garmin warned that falling prices and increased competition would hurt margins in 2010, sending its shares down as much as 9 percent,” Sayantani Ghosh reports for Reuters. “The personal navigation market — once a duopoly of Garmin and Dutch rival TomTom — has become increasingly crowded.”

“The severity of the decline in its PND business forced Garmin to foray into the smartphone market last year with the nuvifone, pitting it against the likes of Apple’s iPhone and Research in Motion’s BlackBerry,” Ghosh reports. “The company, however, said it was disappointed by the sales of the nuvifone till date but added that it would spend most of its R&D dollars in this business in 2010. ‘I think the incremental R&D dollar will be shunted more towards their other businesses and to the nuvifone, which will be given at least another year to prove its viability,’ Oppenheimer & Co analyst Yair Reiner said.”

MacDailyNews Take: Here, we’ll save you at least another year: Garmin’s nuvifone is not viable.

Ghosh continues, “The company plans to launch two more models of the phone in the first half of this year.”

MacDailyNews Take: A shouted “Ballmeresque!” sends peals of laughter ringing forth, echoing down the cavernous halls of the palatial MDN headquarters.

Ghosh continues, “Shares of the Cayman Islands-based company were trading down almost $2.20, or more than 6 percent, at $32.25 in afternoon trade on Nasdaq.”

Full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]