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Garmin considers exiting smartphone business

With lower than expected sales of its GPS-smartphone hybrids, Garmin may pull the plug on its smartphone division.

Though the Garminfone was a huge improvement over Garmin's first smartphone, sales continue to disappoint.
Sarah Tew/CNET

Garmin's start to the smartphone business was a rocky one, with numerous delays and a poor introductory device, and though the company's second handset, the Garminfone, was a vast improvement, the outlook for Garmin's smartphone unit isn't a rosy one.

In an interview with Reuters, Garmin Chief Financial Officer Kevin Rauckman said sales of its Nuvifone handsets have not met company expectations and that it will examine the business over the next couple of quarters and decide whether to continue to invest or exit the smartphone market altogether.

"We're pragmatic. If we end up ultimately not successful with units...we'll have to sit back and evaluate that and consider making the best decision for our business," Rauckman said.

Smartphone sales for Garmin totaled around $27 million for the second quarter. Currently, the Garminfone for T-Mobile sells for $99.99 with a two-year contract. The Nuvifone is no longer listed on AT&T's Web site, though you can find it at some online retailers for around $315 unlocked. Analysts estimate that Garmin would have to sell around a million smartphones a year to compete in the current market.