Garmin Dominates U.S. Market for GPS Devices - But Stock Still Takes a Big Hit

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					When you're in need of directions, there's no better device than a GPS.

But when it comes to mapping out winners and losers in the GPS devices marketplace,
we turn to the guidance of our 15,000-member ChangeWave research network. And
what they've told us is that Garmin (GRMN) - the top GPS manufacturer in the world
- has achieved near total domination of the U.S. marketplace.

During February we conducted two ChangeWave surveys on global positioning
systems - one on consumer GPS trends (n = 3,773) and the other on corporate
purchasing trends (n = 2,013). Here's what we found:

Consumer GPS Trends

Our February 18-25 survey of consumers who own a GPS navigation device, shows
Garmin with a 56% market share - an increase of 4 percentage points since the
previous survey in January 2008. Garmin's percentage towers over its closest rival
Magellan, which captured only 12%.

Looking at the next 90 days, Garmin (54%; up 5-pts) remains first on the map in
terms of planned consumer purchases of GPS navigation devices. TomTom is second
with 8% (down 1-pt), and Magellan has fallen to third place with just 4% (down

Corporate GPS Trends

In our February 11-15 corporate buying survey, Garmin is also the dominant leader
with a hefty 58% share of the corporate GPS market. That's a full 11-pts higher than
the previous corporate buying survey in November 2007.

Magellan also gained some corporate ground since the previous survey (12%; up
4-pts), even as TomTom's numbers have fallen to 9%, down 3-pts since November.

Going forward it's more of the same, as Garmin is dominating planned corporate GPS
purchases for the 2nd Quarter with a 56% market share That's a huge 10-pt jump since

Magellan takes second with 10% (up 2-pts), while TomTom limps in at 5% (down

Best Quarter in History? Now Wait a Minute.

Garmin's February 20th quarterly earnings call has confirmed our ChangeWave
survey findings, with the company stating flat out that it was the "best quarter in our
Garmin reported earnings per share of $1.39, on sales of more than $1.2 billion - a
99% increase from a year earlier, with profits up an impressive 70%. Analysts had
projected earnings of just $1.12 per share. To top it off, the company stated that its
outlook for the rest of 2008 remained strong.

So with all that good news, you might wonder why Garmin's share price took a big
20% hit in the weeks immediately following their quarterly earnings announcement.
Or why Garmin's stock price is now down nearly 60% from its 52-week high.

According to Wall Street analysts, the combination of significantly lower profit
margins for Garmin (down more than 15%) and a retrenchment in U.S. consumer
spending has undermined Garmin's stock price. In addition, Garmin's average unit
selling price dropped precipitously last quarter, and their CFO recently predicted it
will drop another 20% in 2008.

Another factor is the continued slowdown in U.S. consumer spending. Our February
survey found an astonishing two-in-five U.S. respondents (39%) saying they'll spend
less over the next 90 days than they did a year ago - 5-pts worse than our January
2008 survey.

The decline in spending is occurring across all income levels. But most ominously -
not only for Garmin but for the entire GPS devices industry - the survey showed
consumer electronics spending in the midst of a major slowdown.

To put this in perspective, it's the weakest outlook for electronics spending ever
recorded in a ChangeWave survey.

Given such a slowdown, it's understandable why Garmin and so many other high
flying electronics stocks have had an extremely rough go of it lately. But despite
shrinking profit margins and an extremely tough consumer spending environment, our
latest ChangeWave surveys show Garmin is gobbling up share in the high growth
GPS market.

The verdict is out on whether Garmin can return to its previously lofty heights - but
it's a company investors should be watching closely.


The ChangeWave expert research network is composed of 15,000 highly qualified
professionals. Members are surveyed weekly on a range of topics, and ChangeWave
converts the findings into proprietary reports. Visit us to see more ChangeWave GPS
findings and to receive ChangeWave Technology Alerts.

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