After two years of partnership, Asustek Computer Inc (華碩) and Garmin Ltd, the US’ No. 1 portable navigation devices maker, are calling it quits.
Asustek, the world’s No. 5 PC brand, yesterday confirmed that both parties agreed to scrap their “co-branding” strategy starting from next year.
That means consumers will no longer find smartphones that bear the “Garmin-Asus” logo in the future because Garmin has decided to pull out of the smartphone business, Asustek corporate vice president Benson Lin (林宗樑) told a media briefing.
“Navigation smartphones need more time to take off ... We are not keeping up with industry changes and are losing competitiveness,” Lin said.
Ending the co-branding partnership will allow the companies to “focus on [their] respective core competencies,” he said.
Asustek and Garmin teamed up in January last year to introduce co-branded smartphones, with Asustek managing the hardware and Garmin supplying the navigation solutions.
The two companies had plans to officially launch a joint venture this year to enhance the partnership, but the idea was scrapped after sales of Garmin-Asus phones hit a snag in the US amid strong competition from Apple’s iPhone and the wide availability of Google Maps in other smartphones, Lin said.
After the split, Asustek will market handhelds carrying the “Asus” logo, and Garmin will offer exclusive rights to its navigation software to Asustek’s Android-based smartphones “for a few years,” he said, declining to detail the licensing terms.
The split also means Garmin will be able to market its navigation solutions on other app markets for non-Android-based handsets. These include Apple Inc’s App Store and Research In Motion Ltd’s App World.
Garmin’s Dutch rival TomTom NV is selling navigation apps on App Store for US$49.99 for Hong Kong users, US$89.99 for West European users and US$59.99 for US users.
If consumers just get a Garmin-Asus phone, they won’t be able to realize the hidden values offered by Garmin solutions, Lin added.
The two partners had launched six Garmin-Asus smartphones over the last two years, mostly to lukewarm reception. Asustek’s earlier target to ship 1 million smartphones this year remains challenging, analysts said.
The company is hoping that its recent foray into TD-SCDMA phones for the Chinese market will bear fruit and help expand sales.
Lin said Asustek would launch two models running on China’s proprietary 4G standard by the end of the year, adding that the firm was in talks to bundle phone sales through China Mobile Ltd (中國移動), the world’s largest mobile operator by number of subscribers.