An OGPS makes a comeback... An original GPS company. We're talking Garmin. The GPS-tech company was founded in 1989 by Gary Burrell and Min Kao (hence, "Gar-Min"). Its stock just hit a 12-year high on an A+ earnings report: quarterly profit nearly doubled, jumping to $361M in Q4. Garmin has a bunch of divisions, but it's lost some of its consumer-appeal over the years. Enter the smartphone...
- Car GPS: Garmin introduced GPS III in 1997 to guide your commute (your dashboard is still bruised from the suction cup) — now you connect apps like Google Maps to CarPlay instead. Garmin's auto revenue declined 14% last year and profits are close to zero.
- Wearables: Garmin's Foretrex was the wrist-worn GPS sported by joggers in the early 2000s (1st gen iPod not included). Then Fitbit and Apple took over the wrists of casual joggers. Garmin is still in the wearables game, but lags marathons behind Apple.
- Handheld GPS: Garmin launched the compact eTrex in 2000. Now "handheld GPS" is synonymous with smartphone.
To beat iPhone... go where iPhone won't have service. And Garmin's winning in areas like: Marine GPS (no bars in the ocean), Aviation GPS (does inflight WiFi even work?), and Outdoors (think extreme skiing). Garmin wants to be 35K feet in the air and 30K leagues under the sea — anywhere iPhone can't.
Don't underestimate the power of Barriers to Entry... The road less traveled is usually toughest, but Garmin uses it to its advantage. Marine/aviation are tougher areas for others to enter than regular consumer markets — that means less competition. GPS guiding a military plane is a bigger technical responsibility than GPS guiding you to Starbucks. With big responsibility comes a fat profit margin — Garmin made 74 cents of profit for every $1 of aviation sales.