Analyst: Sell-off in Garmin "Completely Overdone"
Shares of Garmin (NASDAQ: GRMN) saw much pressure this week after Apple (NASDAQ: AAPL) unveiled its new Maps app, which is designed to replace the Google (NASDAQ: GOOG) maps that currently appear on iOS devices.
On Monday, Apple kicked off its annual Worldwide Developers Conference (WWDC) with a preview of iOS 6, the next update to the company's popular mobile operating system. More than 200 new features will be included in the new iOS when it's released this fall, but members of the iOS Developer Program can gain access to iOS 6 now by using the beta version.
iOS 6 will be available to iPhone, iPad and iPod touch users this fall as a free software update. New iOS 6 features include the all-new Siri-powered Maps app with Apple-designed cartography, turn-by-turn navigation, and a new Flyover view.
The turn-by-turn functionality hurt GPS makers, particularly Garmin -- a provider of navigation, communication and information devices and applications, which are enabled by GPS/Map technology. Despite Garmin's downfall (in the hours after Apple's conference, shares plummeted 9%), the company rebounded Tuesday along with other GPS manufacturers, which saw strength after some analysts concluded that the sell-off was overdone.
According to the analysts who spoke with Benzinga, Apple's new Maps app definitely hurts Garmin's Personal Navigation Device (PND) business. However, that should not matter, as most analysts do not place any significance on Garmin's PND business when valuing the company.
Instead, most analysts look at Garmin's non-PND business to build value. According to these analysts, Apple's Maps app does not change the valuation of Garmin's non-PND business. Hence, these analysts believe yesterday's sell-off was "completely overdone."
Garmin designs, develops, manufactures and markets a diverse family of handheld, portable and fixed-mount GPS-enabled products and other navigation, communication, and information products for the automotive/mobile, outdoor, fitness, marine, and general aviation markets.
Currently, shares of Garmin are trading down by roughly 1.92% at $38.31 per share.
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