S GRMN @ 37.63

Garmin (NASDAQ:GRMN) introduced its new product today, a hybrid phone/gps system that will retail for $299 after rebate on AT&T, with an additional $5 monthly charge.

This device represents the company’s latest attempt to thwart those who are forsaking its stand-a-lone GPS systems for applications on their smartphones.  Recently, the rise of GPS navigation for high-profile products such as the iPhone 3G (NASDAQ:AAPL) and the Blackberry Tour (NASDAQ:RIMM) have driven customers from companies like Garmin and TomTom, who only sell independent navigation systems.  iSuppli has predicted the the market for so-called PNDs will increase by only 15% over the next 5 years, while over the same period shipments of smartphones will increase by over 400%.

It is for this reason that I am recommending a sell of GRMN.  They are being battered by an industry that is much bigger than themselves, and with this much-delayed new product, they needed to hit a home run.  From initial impressions floating around the internet, the phone isn’t actually described as bad.  In fact, some of the reviews are quite positive.  But relative to the other smartphones on the market, the price is too high, as you can get an iPhone 3Gs with a GPS application from Navigone or TomTom for much less if you include the PV of the $5 monthly fee. There simply is no compelling reason for consumers to buy this phone over an iPhone or a Blackberry, and it is for that reason that I am bullish on both those companies.

Disclosure: No holdings in GRMN, Long AAPL and RIMM.

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