After Nokia's purchase of mapping company Navteq, there's a new rumour from Investor's Business Daily that GPS device manufacturer Garmin are looking to fight back with their own GPS phone. Garmin have traditionally used Navteq's maps in its devices, but with Nokia's increasing push into the GPS market, the Finnish mobile phone company is increasingly being seen as a competitor to Garmin.

Nokia's purchase of Navteq therefore effectively puts the mapping data that Garmin relies upon inot the hands of a new rival.

But can Garmin really take on Nokia at its own game?...

Technically, the answer has to be yes. Mobile phones are extremely sophisticated devices, but so too are GPS devices, which these days cram in all sorts of extra functionality, including MP3 players, video players, and even hard drives. Most GPS devices also come with Bluetooth, and let the user control their phone via the GPS unit.

As such, Garmin undoubtedly has the technical ability to develop its own mobile phone with GPS functionality.

However, as Apple have discovered, the mobile phone market is hugely complex. It's not simply a case of building a gadget and selling it to the users - you have to persuade a mobile network operator to carry your new phone.

Most operators have deals in place with mobile phone manufacturers whereby the phone comes locked into their network, with the operator subsidizing the cost of the phone to the user. If you build a new phone and have no operator deal in place, then your phone will either cost several hundred pounds more than its competitors, or worse, won't actually work on any phone network at all.

In short, Garmin's decision will depend more on the politics of the complicated mobile phone industry than it will on the technology it's capable of developing.

Features of a Garmin GPS Phone

According to Jeff Evanson, an analyst with Dougherty & Co., "Garmin knows it could build one hell of a fantastic wireless handset." Evanson believes Garmin will bring out a GPS phone as early next year, which is also the year when most of Nokia's higher end mobile phones will also come with GPS built-in.

Garmin are also already active in the mobile phone market, making GPS applications for other companies' mobile phones.

However, Richard Valera, an analyst with Needham & Co., believes Garmin won't make a mainstream GPS phone to take on Nokia head on, but will instead focus on a niche market for people who want a mobile phone with a heavy navigation focus.

Presumably, Valera is thinking that Nokia's current best GPS phone, the Nokia N95, is good, but isn't quite good enough yet to replace dedicated GPS devices in the car, whereas a Garmin GPS phone would be, as Garmin have significant experience of what people are looking for in a GPS device.

However, the N95 came out last year, was Nokia's first attempt at a GPS phone, and was released before the company bought Navteq. Its new phones that it will release next year will be much more sophisticated, and will benefit from the experience Nokia has effectively acquired from Navteq. Nokia's GPS phones may not be able to replace GPS devices this year, but they certainly will next year, in the same way that their camera phones took over the low end digital camera market.

The Future for Garmin

The future for Garmin looks a bit uncertain at the moment. Its share price plummeted when Nokia announced it was buying Navteq, but its recovered significantly since then, buoyed by other rumours that Microsoft might be looking to take it over.

Garmin themselves have claimed they're not currently working on a GPS phone. "We announce 70 products a year so there are a lot of concepts and ideas that we look at, however that's not in the immediate plans," said Garmin spokeswoman Jessica Myers, before adding "I can't say we're never ever going to do it. I mean, we've already done it."

In this, she was referring to the Garmin NavTalk, which was released in 1999, and was only on sale for a year or two.

Times have changed since then, though, and Garmin may have no choice but to release a new GPS phone if it's to fend off Nokia, the Finnish barbarian at its gate.

[Source: Yahoo Financial News]