Watch CBSN Live

Good Call: Garmin Considers Giving Up the Smartphone Race

Garmin is admitting that its smartphone ventures with Asus haven't been as successful as it hoped. Garmin-Asus CFO Kevin Rauckman, who said as much in a recent interview, should be commended for his honesty, but GPS company's chances of turning into a profitable phone manufacturer were slim from the start. As noted in a previous Gadget Watch post on Garmin, there are a couple problems with the company's entry into the mobile space.

The big issue is price. For instance, flagship T-Mobile Garminfone launched this summer for $250 -- just a few bucks cheaper than the Apple (APPL) iPhone and higher than T-Mobile's more complex phones like the MyTouch 3G Slide. The lackluster camera and no headphone jack didn't help sales. To quote Chris Zigler of Engadget, "We suppose the awesome car dock will attract some, but the myTouch 3G Slide certainly seems like the better option for less money -- maybe this would work at $99 or $149, we suppose."

Unfortunately, Garmin (as well as its GPS competitor, TomTom) was having an identity crisis before the phone even was announced. Back in April, Garmin released the Nuvi 3790T, a multi-touch vehicular GPS that ran for the very price of $450. The problem was that the Apple iPad was released on April 3rd -- and cost only $50 more than the glorified digital map. Like point-and-shoots and basic video cameras, GPS-dedicated devices are losing ground to the smartphone market. Getting into one of the most crowded mobile spaces right now isn't going to help.

I agree with my BNET colleague Chris Dannen that Garmin had the right idea when it came to blending GPS and phone the same way Apple blended music and phone. The problem is that Garmin is using the smartphone market to take refuge from its slowly decaying GPS sales, but now the company realizes that rushing into mobile -- and overcharging customers -- isn't the way.

Photo courtesy of Gavin Anderson // CC 2.0