1. The Business of Being Garmin FRS 142: Where’s Waldo? The Science and Application of the GPS System 4/12/2004 Jonathan Lew

2. GPS Industry $4.7 billion market for GPS receivers in North America Expected to double by 2008 Military origins Civilian GPS users outnumber military 100- to-1 “In the coming years, every car may use GPS, while handhelds and cell phones are moving in that direction, too. GPS isn’t just for boats, planes, and hikers anymore.” – The Motley Fool

3. Garmin – The History Two employees fed up with their company 1989: founded ProNav 1990: GPS 100 Operation Desert Storm 1991: GPS 100 AVD 1994: 19 different receivers, including handhelds

5. Garmin – Now 2021 employees More than 120 different products “Built and sold millions” of GPS receivers Market value at $4.6 billion Outsources little Listed on nasdaq: grmn

6. Products Galore!

7. Automotive GPS Unprecedented potential Dominates the $170 million business for aftermarket GPS receivers But automakers are building receivers into dashboards

8. Aviation GPS Controls an 80% share of the civil avionics business G1000 – integrated avionics system ADS-B: Automatic Dependent Surveillance – Broadcast Most profitable

9. Market Leader Consumers bought 2 million GPS handhelds in 2002, more than half were Garmin made Introduced 22 new products Brand name recognition Financials!

10. Market Leader - Finances Profitable since first product in 1991 Incredible 40% operating margins and 32% net profit margins Cash and investment hoard: $525 million Growth: 2002 sales revenue up 31% in Europe, 51% in Asia Employment in the face of downturn

11. tangent: $(grmn)$ 2003: shares rose 86% Strong financials $.50-per-share annual dividend Price? – P/E ratio: 26.41

12. Competition Traditionally: Magellan, Cobra Electronics Big names entering the market: Sony, Toshiba SiRF Technology Dropping prices Reduced margins

13. Fighting Back Barriers to entry Purchasing UPS Aviation Market niches: iQue Using its market position and brand name Research and Development

14. Plans for 2004 Continue its customer-driven focus GPS integrated units: iQue 3600 Automotive Navigation: technology Marine Products: color, price, maps Handheld Receivers: pricing, entry-level users Wireless: mobile phones

15. Garmin in the News Mar 25 th - “Garmin Offers Anglers a Boatload of New Lake Maps” Feb 12 th - “Garmin Unveils the Foretrex 201 – a Hands-Free GPS Device” Feb 24 th - “Garmin’s G1000 Integrated Avionics System Aboard the Hondajet”

16. Implications Competition is good for the industry – Lower prices – More innovation – More efficiency Who will shape the GPS industry of the future?

17. References http://www.garmin.comwww.garmin.com http://www.fool.comwww.fool.com “Taking the World by Hand; Garmin rules the hot GPS business. But for how long?” – Arik Hesseldahl, Forbes, 2003, 172(9) “For those on the run” – Angela Forgeron, National Post, 27 December 2003 “Garmin” – Datamonitor Company Profiles, 2003, 3 March “Tech Trader: Will Garmin Lose its Way?” – Bill Alpert, Barron’s, 8 March 2004 “Garmin shares may fall, hit by rivals” – Total Telecom, 8 March 2004