The navigation world became a little smaller this week as Garmin announced it has completed its acquisition of Navigon, a Germany company with a sizeable presence in European navigation.
The deal will bring some enhanced capabilities to Garmin. For instance, Garmin said in a statement that Navigon’s work in the European automotive OEM business will help Garmin to expand its automotive OEM footprint. Like all GPS companies, Garmin is looking to diversify its offerings as sales of handheld portable navigation units lose ground to smartphones with navigation apps.
Garmin would like to get in on the apps business, and the Navigon acquisition should help on that front as well. Garmin noted that Navigon has “one of the top-selling navigation applications for the iPhone and Android platforms—something that we expect will help drive revenue for the combined company going forward.”
It makes sense for Garmin to team up with Navigon, not only for greater expertise in apps and the OEM automotive market, but also for a larger reach into the European market. Garmin has battled against rival TomTom there, and this acquisition may help Garmin even the playing field a bit.
It seems safe to say more and more people will choose to access GPS navigation via their smartphones, so Garmin is right to take steps into the app world. If the company can develop a fantastic navigation app for smartphones, it could probably do well in sales. But it has to offer features beyond what the free apps do. A premium product needs to be worth the cost.