I usually have a gut feeling about consumer electronics probably due to the fact that I am of the generation that grew up with DSL, laptops and mp3 players. My gut feeling with stand alone GPS devices is that in a couple of years, only ones that are built in to your car will exist, and they will pretty standard. For Garmin, this is not good news. These units are only going to get cheaper which will cut margins even more and integrated with phones which have already started integrating mp3 players. Apple and some other companies have been doing this already.

So what is Garmin trying to do now? The Nuvifone. THE NUVIFONE HAS THIS AND THAT BLAH BLAH. Come on, can it really compete with the IPhone. Does it really have any features that will make someone say “you know what, go to hell iPhone, I’m buying the NUVIFONE!!”. No. Tim Weidman wrote that the coolest feature is that you can talk on the phone and still get directions. WOW! How about just saying hold on or when the voice command comes on just ignore your phone or even better, just look at where you need to turn with your eyes.

Anyway, those are just my impressions, if I didn’t back this piece up with any facts about why I think Garmin is done, there would be no credibility.

1. Garmin is the leading portable GPS unit maker (56% market share), but its margins are slimming every single quarter (down 15%). The CEO thinks units prices will drop another 20% this year

2. SiRF Technology (SIRF), a GPS chip maker, is cutting jobs because of softening consumer demand

3. Delayed Nuvifone. Putting your eggs in one basket and then delaying the release to ‘sometime’ in the first half of 2009 isn’t going to cut it. Steven Halpern must be going OOPs as he released an article yesterday praising the Nuvifone and rated the stock a buy.

4. Revised revenues for 2008 see 3.9 billion instead of 4.5. Eps down to 4.13 from 4.40. COGS and SG&A have also increased by more than 25% each.

Should you short this ?? I think so in the long run, this is a short. In the short run… this just bonked 20%, it may recover a little with all the indicators pointing at oversold.

I came across an interesting video from my friends at ino.com (original link) that showed
why buying Apple Computer at the 149 range after the stock was down 10% afterhours was
not a big risk.

Just a quickie, I went out and bought a few shares of RIMM before its earnings. Bad move, but I really thought the 65 days that the IPhone was sold out would push earnings over estimates. Oh well, I’ll probably close the position tomorrow.

Apple is expected to sell 10 million iPhone units in 2008 and already has a 19 percent market share in the smart phone arena. A new model of the iPhone sometime this fall and the release of G3 technology will undoubtedly push the iPhone over that marker. Since Apple is not the type of company to give estimates it cannot beat, the real numbers should only be higher. I’m confident the upcoming holiday season should drive sales 1.5 to 2 times the amount of other quarters. Also, look forward to WWDC where Steve Jobs will most likely unveil iPhone 2.0 with .Mac syncing.

Now on to technical analysis. Apple is very attractive even after its recent 3 month (30%) run up. In fact, I feel that Apple is forming a beautiful cup and handle formation that will see another 20-30 point run up in the next 2 months. Also, the stock has formed a golden cross in May and it seems that the consolidation period is over. Finally, the stock has been trading over its 50DMA and 200DMA.