Garmin punches into cellphone market with iPhone-style navigation gadget: Analyst: Pricing will be key to success

Garmin Ltd. yesterday in New York revealed its “nuvifone” product, a personal navigation device (PND) with a touchscreen, GSM/HSDPA functionality for voice and data and native GPS.
While the product had been long-rumored, the timing seemed to surprise the market.
Photographs of the device immediately brought to mind the industrial design of Apple Inc.’s iPhone, according to one analyst. The device also appeared to be the latest specialized handheld to add cellular capabilities, much like the iPhone is an iPod music player with cellular voice and data features added on.
The traditional cellular market, of course, has ranged from the phone-plus (such as the Walkman and Cybershot handsets from Sony Ericsson Mobile Communications) to the “Swiss Army knife” model of cramming wide-ranging functions into a single device.
Garmin said that the device will not hit the market until the third quarter and that carrier discussions are under way. Thus, pricing and product positioning also remain open questions.
“The pricing will be key to the nuvifone’s success,” said NPD Group analyst Ross Rubin.
$300?
Rubin said that AT&T Mobility is the likeliest candidate to add the device to its portfolio and speculated that the nuvifone could end up selling in the vicinity of $300. The proverbial road warrior is the likeliest market for the navigation phone, he said.
While Garmin’s addition of cellular functionality to its bread-and-butter PND expertise had been rumored for some time, Rubin said the timing of its nuvifone announcement appeared to catch the market off-guard. The analyst said he expects a number of large display, touchscreen devices with location-based services or navigation capabilities to be launched at next month’s Mobile World Congress in Barcelona. (Apple Inc. announced LBS-related software upgrades to the iPhone earlier this month and Rubin said that may have been an effort to meet the challenge of Garmin’s new device.)
The nuvifone’s form factor to a degree mimics Apple Inc.’s iPhone, which is likely to produce flattering comparisons, but the operating system is Garmin’s own and, therefore, Rubin said, the device is not a smartphone.
Questions raised
Other unknowns, according to the analyst: no information yet on the device’s memory capacity, Web-browsing capabilities, business support or battery life. Some of those questions may well be answered when a top-tier carrier deal is announced, the analyst said.
Garmin International Inc.’s COO Cliff Pemble said in a statement that the device is “the breakthrough product that cellphone and GPS users around the world have been longing for,” a bit of hype that nonetheless reflected Garmin’s push into international markets.
The nuvifone is designed to be handheld or mounted on the dashboard of a vehicle. Three primary icons on the touchscreen provide “call,” “search” and “view map” functions. It includes pre-loaded maps of North America, Eastern and Western Europe and provides turn-by-turn directions with a million points of interest. The nuvifone is Garmin’s first to include Google’s local-search capability. A “where am I?” feature offers nearby police and hospital locations as well as the user’s exact coordinates by latitude/longitude as well as street intersections.
The “slickest” feature, according to Rubin: a user can snap a photograph from his/her location and send it to another nuvifone user, who can obtain turn-by-turn directions to reach the sender’s location.