REAL MONEY2015 2020FEBRUARY 2010
Garmin announces
that 2009 revenues
dropped 15% amid
the financial crisis
of 2008–2009.AUGUST 2017
Garmin introduces its
Vívoactive 3 watch,
which comes equipped
with contactless
payment options.FEBRUARY 2020
Garmin reports 2019
revenues of $3.8 billion,
topping pre-crisis levels.SOURCE: S&P GLOBALFORTUNE APRIL 2020 43has thrived in competition with them.
Watches and other wearables made
up about a third of Garmin’s $3.8 bil-
lion in revenue last year. It sports
a $15 billion valuation, making it a
minnow compared with rivals Apple,
Alphabet, and Samsung—but a sub-
stantial player in its own right.
How Garmin withstood the on-
slaught is a case study of a company
sticking to what it knows best—in
its case, products pegged to one key
technology, GPS devices—and proof
that not all innovation comes from
a sun-kissed strip of land in North-
ern California. Indeed, Garmin’s
aw-shucks Midwestern nature and
its stick-to-itiveness in the face of ad-
versity go a long way in explaining its
staying power. It’s hard to imagine thecompany’s mega-cap rivals acknowl-
edging, for example, that they more or
less lucked into what would become
a killer app. “What we probably un-
derestimated was the importance of
the wearables,” says Pemble. “We were
dabbling with it way back when. But
nobody could foresee that it would
become the category that it is today.”
The big tech companies remain
an existential threat for Garmin, of
course. Apple and Samsung are the
two biggest players in smartwatches,
and Alphabet’s Google is in the pro-
cess of buying rival Fitbit. “Selling the
watch to the masses requires a dif-
ferent product and a whole different
mindset than what [Garmin is] doing
today,” says Stephen Baker, an analyst
with market researcher NPD Group.“There aren’t a lot of instances where
companies have been able or even
tried to make those kinds of leaps.”GARMIN DIDN’T set out to con-
quer mass markets, focusing
instead from the beginning on
niche products for enthusiasts
like boaters, pilots, and off-
roaders. Its founders, Gary Burrell
and Min Kao, were engineers at Al-
lied Signal who started the company
in 1989, shortly after GPS became
available for civilian use. (The
muscular-sounding Garmin is simply
a mashup of the duo’s given names.)
Affordable navigation systems were a
revelation for hobbyists, giving them
access to the same technology previ-
ously reserved for users of sophisti-
cated military equipment.
The company released its first
product, the unglamorously named
GPS 100, in 1991. It targeted small
boats and planes, and it was so popu-
lar that by the end of the year, Gar-
min was profitable. Seven years later
it would introduce the product that
didn’t just put Garmin on the map, it
put digital maps in people’s cars. In-
car navigation “was a category that
we pioneered,” says Pemble, who is
54 and was Garmin’s sixth employee.
“That gave us rocket fuel. It made
Garmin a consumer brand.”
Along the way, Garmin played to
its Midwestern strengths of stressing
a corporate culture based on hard
work and humility. “They knew how
to get the best out of people,” says
Josef Reed, a former systems engi-
neer often tasked with briefing senior
management. “They’d give praise
and critiques at the same time.” Says
Stephanie Mountain, a former Gar-
min marketing analyst: “They were
constantly pushing people to their
limits.”
The company had permission
to push, in part, because it was so
tight-knit. Burrell, a devout Christian
who died last year at age 81, referred
to himself as a “servant leader,” and
his presence was felt throughout the15,000
THE NUMBER OF
GLOBAL EMPLOYEES
AT GARMIN, WITH
OFFICES IN MORE
THAN 30 COUNTRIES,
INCLUDING AT ITS
HEADQUARTERS, IN
OLATHE, KANS., AS
WELL AS IN TAIWAN,
THE U.K., AND
OREGON. HEAD-
COUNT GREW 15%
IN THE PAST YEAR.$1.05
BILLION
REVENUE GENER-
ATED IN 2019 BY
GARMIN’S LARGEST
AND FASTEST-
GROWING CATEGORY,
FITNESS, WHICH
INCLUDES MULTI-
SPORT WATCHES AND
SMARTWATCHES.
SOURCE: GARMINGRAPHICS BY NICOLAS RAPPGAR.W.0420.XMIT.indd 43 FINAL 3/10/2020 1:28:27 PM