Asustek Computer Inc (Asus, 華碩電腦) yesterday teamed up with portable navigation devicemaker Garmin Ltd to produce Garmin-Asus nuvifones for location-based navigation services (LBS) worldwide.
The partnership will leverage the companies’ navigation and mobile telephone expertise to design, manufacture and distribute location-centric mobile phones, an Asus statement read.
Garmin-Asus nuvifones will be on display at the Mobile World Congress trade show in Barcelona, Spain, from Feb. 16 to Feb. 19. The companies declined to reveal details before the launch.
Garmin chairman and chief executive Min Kao (高民環) said: “The alliance came out of our original design manufacturing [ODM] relationship with Asus to produce the initial nuvifone that was announced in 2008.”
But Garmin later realized that by leveraging and combining its respective industry-leading areas of expertise at a higher level, the Kansas-based Garmin would be able not only to significantly expand its product line, but also to shorten its product development time, Kao said.
Asus chairman Jonney Shih (施崇棠) yesterday vowed to roll out more models in the second half of this year although profitability would most likely occur next year.
He said that such a move was not a departure from its core business of making notebooks.
“The emerging trend towards a comprehensive digital life seen through converged devices is becoming indisputable. Hence, phone-computing is an opportunity that Asus simply can’t miss,” Shih said.
In terms of research and development, Asus will leverage its strengths in 3G, long-term evolution technology and its essential intellectual patents, while Garmin will focus on LBS and GPS applications, he said.
Asus said that the manufacturing of the phones would either be done in-house or be outsourced while marketing and sales efforts would center around co-branding, and each company would focus on the geographical areas where they have the strongest footprints.
The Garmin-Asus alliance means Asus will no longer be producing personal navigation devices or cellphones using its own brand name.
At the same time, Garmin will be severing all of its other business relationships with cellphone makers and ODMs as well.
A telecommunications analyst at International Data Corp, John Cheng (鄭若望), yesterday said that he was happy to see the latest developments.
“Lately, there seems to be a trend for personal computer vendors to go into the handset business. Dell Inc and Acer Inc are the two latest examples this year. I suppose it makes sense because mobile Internet, especially in developed markets is very mature at this point,” Cheng said.
The analyst, however, said he held some concerns for the partnership.
Cheng said he doubted if handsets based on LBS technology alone could garner enough interest for Garmin-Asus, whether the different product cycles between computers and handsets would create some logistical problems for the two companies, and what Garmin-Asus is doing about the growing popularity of the Apple iPhone and Blackberry.