Garmin's Super Bowl debut hints of a much bigger game
If it isn't clear by now, a 30-second spot during Super Bowl XLI will end any confusion: Garmin (GRMN), the little company from Kansas that got its start making GPS devices for pilots, soldiers, and sailors, ain't really in Kansas anymore. Last week Ad Age reported that the market leader in GPS products is joining the Super Bowl ad lineup for the first time, with a spot created by Minneapolis-based agency Fallon.
First off, co-founder and CEO Min Kao has reason to gloat a little. Garmin now owns more than 60 percent of the domestic market for personal navigation products, and it's on track to hit $1.68 billion in sales this year, a 64 percent jump from 2005. (The $10 stock from 2001 now hovers around $50 a share.) But the Super Bowl buy is just the latest move by Garmin to show that it's going all out — to bust out of its longtime geekish obscurity to become an A-list consumer brand, and to put some distance between itself and me-too rivals like Europe's TomTom.
In September it released the hot in-car navigator nuvi 660. In November the company took a cue from Apple's (APPL) brick-and-mortar success, opening its first flagship retail store in downtown Chicago. In December, the company announced an all-new line of marine products, topping off a year in which Garmin unveiled a pretty spectacular 70 new products. And this month Garmin rolled out the Zumo, the first navigator exclusively for motorcycles, and then the Astro GPS dog tracker, to keep pets from becoming strays.
All this comes at a portentous time in the market: Sony, Honeywell, Nike, and others are jumping into GPS, and perhaps Apple as well with the iPhone. Garmin's infamously fat profit margins have begun to slip, and TomTom is proving to be a vicious competitor—the raft of patent lawsuits dangling between the two companies will keep both company's lawyers busy most likely for years. But to those who know the company, the Super Bowl spot doesn't mean that Kao is simply doing a little $2.6 million touchdown dance because he can; it means that Garmin has decided it's playing to win in the market it invented.
First off, co-founder and CEO Min Kao has reason to gloat a little. Garmin now owns more than 60 percent of the domestic market for personal navigation products, and it's on track to hit $1.68 billion in sales this year, a 64 percent jump from 2005. (The $10 stock from 2001 now hovers around $50 a share.) But the Super Bowl buy is just the latest move by Garmin to show that it's going all out — to bust out of its longtime geekish obscurity to become an A-list consumer brand, and to put some distance between itself and me-too rivals like Europe's TomTom.
In September it released the hot in-car navigator nuvi 660. In November the company took a cue from Apple's (APPL) brick-and-mortar success, opening its first flagship retail store in downtown Chicago. In December, the company announced an all-new line of marine products, topping off a year in which Garmin unveiled a pretty spectacular 70 new products. And this month Garmin rolled out the Zumo, the first navigator exclusively for motorcycles, and then the Astro GPS dog tracker, to keep pets from becoming strays.
All this comes at a portentous time in the market: Sony, Honeywell, Nike, and others are jumping into GPS, and perhaps Apple as well with the iPhone. Garmin's infamously fat profit margins have begun to slip, and TomTom is proving to be a vicious competitor—the raft of patent lawsuits dangling between the two companies will keep both company's lawyers busy most likely for years. But to those who know the company, the Super Bowl spot doesn't mean that Kao is simply doing a little $2.6 million touchdown dance because he can; it means that Garmin has decided it's playing to win in the market it invented.
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