Garmin Predicts Slow GPS Sales

Garmin Ltd has predicted that the financial crisis rocking the world economy might soon spill to the navigation market going by the current trend of events in the global market and more especially at this time that the talks on economic recession appear on the headlines.

Although, the company reported a stronger-than-expected third quarter with a 13 percent increase from the $3.18 billion sales record set last year, there is no doubt that the current economy trend is going to affect the sales of GPS gadgets and related products.

And in order to arrest the situation, the company said that it is actively taking steps to manage our business appropriately. According to Garmin's chief executive, Min Kao, "We are experiencing challenging macroeconomic conditions, yet Garmin's products continued to attract consumers, generating revenue growth and allowing us to expand our global leadership position in the industry. To prepare for slower growth, Garmin will scale back production in the fourth quarter to reduce its inventory by $150 million."

The company is doing whatever that is possible to prepare for slower growth and one of their solutions is to scale back production in the fourth quarter to reduce its inventory by $150 million. While speakingon the issue, the Garmin's president, Cliff Pemble, said that despite the fact that the market for handheld navigation devices is still growing "at a healthy pace compared to other categories" of consumer electronics gear, his company has decided to lower its projections for the year after watching business slow down earlier this month. Garmin believes that the slowdown in manufacturing will allow the company to manage its inventory better as new GPS devices replace older models quickly in the changing market.

The company has also made another high-profile move to increase its earnings per share, the board authorized the company to buy up to $300 million worth of the company's shares before the end of 2009.