GPS gadget maker Garmin says it has chosen a U.S. carrier for its forthcoming “Nuvifone” smartphone.
For whatever reason, the company hasn’t specified which carrier it will be. But it’s likely to be AT&T, the no. 2 U.S. carrier.
That’s not a bad place to sell your phone, but it’s hard to see AT&T putting much promotional muscle behind the device when it also exclusively carries Apple’s iPhone, which is likely to be better than the Nuvifone.
Garmin expects the phone to increase its revenue by about $100 million to $200 million per year. Assuming average smartphone wholesale pricing, we believe that amounts to anywhere from 300,000 to 700,000 units. (For comparison, most analysts expect Apple to sell about 20 million iPhones this year. A successful smartphone does more than a million units per year.)
Garmin is getting into the mobile phone business because the market for standalone GPS devices is feeling pressure from smartphones with GPS services. But by making the actual hardware, Garmin is making a big gamble. It may have been better off just making navigation apps for multiple mobile platforms — the way rival TomTom is making an iPhone app and docking accessory instead.
That $200 million in Nuvifone revenue would increase Garmin’s revenue by about 6%, which is respectable. Still, we’d be surprised if anyone bought one smartphone over another even due to a much better navigation service — so it could be hard to meet its goal.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.