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Yesterday, at a aviation convention (AOPA) I had a chance to discuss the recent drop in Garmin prices with one of their technical sales reps.
He claimed that most of the stock analysts really don't understand Garmin's business and their model. He was aware of the NAVTEQ acquisition by NOK and he indicated that this is not central to Garmin's business plan. He said that the recent draop was caused by analysts not really understanding the GPS market and Garmin's business model.

This reminds of the same kind of historical misunderstanding of RIM (Research in motion that makes the Blackberry unit.)

The conventional wisdom was that a powerful player like Nokia would come out with a phone that would challenge the then unique email and messaging features of upstart company RIM. The challenge never materialized and Blackberry maintained its dominance.

This summer, the Iphone came out and this was going to knock the socks off Blackberry, instead, RIMM stock reached a new high (on the announcement of great earnings).

Yesterday, RIMM had further great 2Q announcements and their stock shot up over 12 bucks.

This is not an endorsement of RIM, but it goes to show that if a company really understands the fundamentals of their business and tools their marketing plan to capitalize on that, then they have a much higher likelihood of being successful over the long haul. Garmin is such a company.

Jack
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