I don’t think that anyone would deny that the world of GPS is changing, and the companies that rely on GPS are changing with it. Garmin recently released the first quarter results for 2015 and for fans of automotive GPS, it’s a grim assessment.
For the last few years, GPS companies have seen a continual and gradual decline in their sales and Garmin has been allowing for 10% – 15% quarterly decline of its automotive unit. In the most recent quarter, the automotive segment fell right in line with that at a loss of 11% from the first quarter of last year. It might not sound like all that much, but this continual decline has really begun to show. To put that in perspective, The Motley Fool reported that in 2011 automotive units made up roughly 60% of Garmin’s overall revenue. However, in 2015, that number has dropped to just over half—a whopping 37% of sales overall.
Perhaps just as worryingly, the outdoor segment of Garmin—which includes not only GPS running watches and dog collars, but also handheld GPS units and sport/hunting units—also saw a surprising drop of 10% this last quarter. Marine and aviation saw nominal, single-digit increases.
All that leaves is Garmin’s growing fitness section, which includes popular fitness trackers like the Fitibit line. Fitness, to contrast all of the other sections, saw a whopping 31% increase in sales, making it easily the fastest growing section in Garmin’s business and clearly one of the main things helping the GPS giant stay afloat. I can’t say that I’m incredibly surprised, as fitness tracking has become incredibly popular over the last year or so.
Of course, Garmin is far from the only company having this continual shift in sales. TomTom reported a couple of weeks ago that it, too, has seen a marked decline in its automotive GPS sales as more and more consumers are turning to smartphones in place of purchasing a secondary GPS unit. Magellan has not published its first quarter results yet, but I would surprised if they were not along the same lines as competitors TomTom and Garmin.
People have been saying for years that GPS is becoming obsolete, and these numbers show clearly how the general public opinion has changed in regards to GPS units. Between the continually declining sales and all of the talks recently about finding replacements for GPS, are these technologies on their way out? I personally don’t think so, but it’s certainly food for thought. What do you think? Share your thoughts with me in the comments!