With its core business in decline, wireless tech company Garmin tries to move into the dashboard.
By Erik Rhey, contributor
FORTUNE -- Remember KITT, the loquacious in-car computer on the television show Knight Rider? David Hasselhoff's digital friend has nothing on a new generation of dashboard "command centers," which combine smartphone docking stations with navigation systems once dominated by standalone GPS (global positioning system) products.
In response to this competition, Garmin (GRMN), the biggest maker of personal navigation devices, is, well, changing gears. The company, based in Olathe, Kans., is partnering aggressively with automakers to embed GPS systems in dashboards instead of relying on device sales, which have declined sharply as consumers increasingly use their smartphones for directions and maps. In fact, publicly traded Garmin's in-dash sales are helping sustain its auto division, which saw year-over-year sales climb 4% in the fourth quarter, boosting the company's 2011 revenue to $2.7 billion.
Garmin's biggest in-dash contract is with Chrysler, which is using Garmin GPS hardware and interface in certain Uconnect dashboard systems for several Jeep, Dodge, and Chrysler models. The tech company is also working with Honda and Toyota (TM) on dashboard systems for the Asian market.
Despite the rise of smartphones, many of which have built-in GPS's, Garmin executives maintain that there's still a need for dedicated navigation systems. Indeed, most phones aren't optimized for use when driving; it is dangerous to steer and hold a phone to look at its display, and GPS apps can also crash if multiple apps are running. "People who are on the road a lot want a reliable signal, a big display, and generally a dedicated personal navigation device," says company spokesman Ted Gartner.
To build the navigation in Uconnect, Garmin turned to one of its other business units, which makes guidance and avionics systems for airplanes, marine vessels, rental cars, and other fleet vehicles. Clint Steiner, director of the Garmin division that sells to automakers, says the company spent six years developing a consumer in-dash system (known internally as the Everest Project). Its aim was to bring the "glass cockpit" experience it was providing to airplanes and ships to everyday drivers.
Garmin isn't ignoring the iPhone phenomenon. In fact, it has teamed up with computer maker Asus to build a Garmin-branded smartphone of its own (with built-in GPS, of course). Its technology for Uconnect can synchronize with a user's smartphone to stream music, make calls via Bluetooth, send voice-to-text messages, and more.
And Garmin has its own app available for the iPhone and devices that run on Google's Android operating system. StreetPilot onDemand lets drivers do everything from check for traffic jams to look up their destinations on Wikipedia -- and that's something KITT definitely couldn't do.
This article is from the March 19, 2012 issue of Fortune.
A round-up of the companies, deals, and trends that made headlines.
Every day, the Fortune staff spends hours poring over tech stories, posts, and reviews from all over the Web to keep tabs on the companies that matter. While that's our job -- awesome, right? -- we realize our readers may not have the same luxury. To save you the trouble, we've assembled the weekend's most newsworthy bits below.
With a traffic increase MOREJP Mangalindan, Writer - Sep 13, 2010 8:05 AM ET
Business Intelligence software is more like interactive gaming than you'd think.
By Wayne Morris, CEO, myDIALS.
Decision making in business should be easier than ever: Next generation business intelligence software gives everyone from entry-level employees to CEOs the ability to make important decisions from data that is clean, current, easy to access and, most importantly, interactive.
(We've come a long way from traditional intelligence solutions that relied on historical data that only MOREJan 20, 2010 10:00 AM ET
Much ballyhooed satellite navigation system suffers technical setbacks and paucity of devices. Who will guide Father Frost?
By Julia Ioffe, contributor
Late last month Moscow celebrated the birthday of Father Frost, the Russian iteration of Santa Claus, with a new-fangled announcement: Father Frost's retinue would move through the holiday skies aided by Glonass, the Russian answer to GPS.
Eagerly waiting children could track his movement online, while he could simultaneously improve his gift-giving MOREDec 1, 2009 11:08 AM ET
New software transforms your phone into a GPS device – and a pretty good one, too
As my wife will tell you, I have a comically bad sense of direction. I once got lost driving home from the mall.
This makes me a prime candidate for a GPS device. I've used a few for brief stints, mostly on long road trips, but never got into the habit of using one for everyday errands. MOREJon Fortt - Oct 30, 2009 7:00 AM ET
TomTom, one of the leading manufacturers of stand-alone GPS systems, rolled out its industrial strength iPhone car navigation software across the time zones Sunday, starting in New Zealand and ending with an app for the U.S. and Canadian markets early Monday.
The price, $99.99 for the app and its maps (a car mount adaptor kit is sold separately), is high for an iPhone application and puts it well above competing software-only MOREPhilip Elmer-DeWitt - Aug 17, 2009 9:27 AM ET
|Yahoo to buy Tumblr for $1.1 billion: Report|
|Stocks on a roll: Yahoo, Microsoft stoke appetite|
|5 reasons why Yahoo is making a $1.1 billion mistake|
|The Winklevoss twins are Bitcoin bulls|