Worldwide provider of navigation, communications and information devices, Garmin Ltd.’s (GRMN) unit, Garmin International Inc., recently entered into a global brand collaboration with Wings for Life World Run.
The Alliance
Wings for Life World Run is a race organized by Wings for Life, a not-for-profit spinal cord research foundation for athletes of all abilities, where participants have no targeted finish line and no distance is set for them to cover.
It is basically a running and wheelchair race conducted to create awareness and generate funds for developing a cure for spinal cord injury. The event will be held on May 3 in 35 locations globally. All funds from the race will go directly to the foundation.
Through the partnership, Garmin will provide both monetary and voluntary assistance to the race’s mission and help to bring awareness. Garmin will also offer a special edition Wings for Life World Run Vívofit 2 activity tracker. Wings for Life World Run Vívofit 2 is designed so as to encourage users to develop healthy habits and live more active lifestyles.
The device will also show support for the race’s cause and its motto “running for those who can’t.” So for Garmin, it is primarily a promo event designed to create awareness of its products and perhaps open up a sales channel.
Vívofit
Vívofit is Garmin’s first slimline fitness tracker launched in Jan 2014. Vívofit had a strong start in the rapidly growing activity tracking category. The success witnessed by its fitness tracker urged the company to launch Vívofit 2, a lower-end wristband, at the International Consumer Electronics Show (CES) 2015 in January.
Vívofit 2 features audible "move" alerts that remind users when it is time to get up and move. An activity timer allows users to track and analyze individual workouts. The new stopwatch feature records timed activities with or without a heart-rate monitor. Also, the device is fitted with a backlight to help users check activity status even in the dark.
The tracker runs on replaceable batteries with approximately a year of battery life and has water resistance of up to 50 meters. Users may set personalized fitness goals, track activity levels, measure calories burnt and monitor heart rate. The device provides inactivity alerts as well.
Priced at $129.99, Vívofit 2 will be available in four colors. However, the one fitted with a heart rate monitor will cost $169.99. Both the new collection of bands and Vívofit 2 are expected to be shipped in the first quarter of this year.
To Conclude
The worldwide provider of navigation, communications and information devices has set a trend of developing active lifestyle products that have become integral to customers’ lives. Its fitness devices including the GPS-enabled running and cycling products are gaining worldwide popularity. Similarly, Vívofit 2 is expected to promote healthy and active lifestyles.
We believe that these products and the focus on quality content continue to endear Garmin to users. But the advent of wearable devices and particularly, fitness devices is a looming threat.
The company’s fourth-quarter 2014 revenues of $803.3 million were up 13.7% sequentially and 5.7% year over year. It also sailed past the Zacks Consensus Estimate of $790.7 million.
The Fitness segment increased 73.3% sequentially and 69.7% year over year. The year-over-year increase was driven by the ramp up of new products including activity trackers and running products.
Stock to Consider
Garmin currently has a Zacks Rank #3 (Hold). Investors interested in the technology sector may consider Universal Electronics Inc. (UEIC), Mistras Group, Inc. (MG) and VOXX International Corp. (VOXX). While Mistras Group sports a Zacks Rank #1 (Strong Buy), Universal Electronics and VOXX International carry a Zacks Rank #2 (Buy).
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