Garmin has been in the wearable tech game for a while now, but recently it's seen its earnings from sales of fitness wearables, including its GPS watches and trackers, decrease. In the last quarter of 2014, takings from its fitness sales grew 70% year on year, but 2015 has seen a first quarter growth of a more modest 31% and now a second quarter increase of just 5%.
Essential reading: Best GPS running watches
This comes as an investor alluded to Fitbit enjoying something in the region of 120% growth in Q2 of this year. Analyst reports are now forecasting up to 180% year on year growth for Fitbit on the back of success for the Charge, Charge HR and Surge devices.
In Garmin's earnings call with investors, CEO Cliff Pemble defended the current growth stall, putting it down to a lack of new products in that period and unfavourable currency markets. Although it's not the company's largest earner (surprisingly it only makes 20% of its revenue from fitness watches), the market still has a lot of potential worth investing in.
Pemble came under questioning from investors, one asking how long Garmin would continue to invest in the tracker market before he would think about "curtailing it" considering there's a "well-established leader". That's almost definitely Fitbit which was valued at $4.1 billion after its IPO.
Garmin's CEO responded by pointing to investment in areas such as advertising which is significant as Fitbit is widely seen to have won the marketing war. "You asked how long we would continue to invest in R&D and our mode of increasing investment right now," he said. "The market is growing rapidly and so consequently the opportunity is there and we feel it's the right time to invest in these things."
Here at Wareable, we are big fans of Garmin's running watches, giving the Fenix 3 and the Garmin Forerunner 620 and 920XT four and a half stars. However, the company's fitness bands such as the Vivofit 2 and more casual sports smartwatches such as the Vivoactive are under threat by Fitbit and Jawbone, whose products are cheaper and garnering better recognition among new, less hardcore fitness consumers.