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March 12, 2008

Garmin: Great Run! But is That It?

Speaking of stocks doing big runs from lows earlier this week, Google isn't alone. Fave of all GPS fan boys, Garmin is up 16% from its lows, and 7.2% today alone.

Not bad. And there is new data out today too, showing Garmin's continuing and striking dominance of the standalone GPS category. The company has 55%-plus of both the consumer and commercial GPS market, a truly impressive show of force.

But where does Garmin go from here? The bulls argue that the GPS show is barely beginning, and we will see them utterly ubiquitous, which will benefit Garmin disproportionately. Bears argue that standalone GPS's halcyon days are ending, that while location electronics will be ubiquitous, it will not be a via a standalone device, more likely via cellphones, laptops, etc.

And where am I? While Garmin's go-go days aren't yet over, I tilt strongly to the latter view. This is a classic example of where integrated devices supplant discrete devices -- with Garmin's belated foray into cellphones not doing anything to change things.

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