has announced its fourth-quarter financial results, showing a drop in revenues across every segment save fitness products. Net profits fell to $129 million, down from $166 million in the same quarter last year, as the GPS hardware maker struggles to compete with the prevalence of smartphones equipped with free mapping and navigation applications.
Garmin's automotive and mobile group, which includes vehicle-mounted GPS devices and accounts for more than half the company's income, saw a 25 percent drop in revenue. Aviation and outdoor divisons only experienced a two-percent slide, while revenue from marine products fell by nine percent.
Although the company attempted to capitalize on the smartphone boom by repackaging its navigation software and map data in a variety of apps for iOS and Android, the titles have encountered trouble competing against free alternatives such as Google Maps. The company's Garmin USA app for iOS costs $50 and requires users to pay an additional $20 for traffic data, among other in-app purchases, and has received less than 100 reviews with an average 2.5-star rating since a mid-December update. Google Maps for iOS, in contrast, is a free download that includes traffic data, with over 26,000 reviews and a 4.5-star average rating since its mid-December update.
Despite the increase in revenues from fitness products, the division only accounted for $104 million out of $769 million in overall Q4 revenue. The fitness lineup includes GPS-equipped watches and other hardware geared for swimmers, runners and cyclists.
"Though business trends decelerated in the fourth quarter, we remain focused on new product development and market share gains to offset the secular declines in the PND industry and the continued generation of long-term shareholder value," Garmin CEO Cliff Pemble said in a statement, which was quoted