Shares of mobile device and navigation company Garmin (GRMN) are down 27 cents, or 0.6%, at $46.22, at after Citigroup’s Jeremy David cut his rating on the shares to Sell from Buy, and cut his price target to $42 from $68, writing that the company’s fitness watches could lose market share to Apple‘s (AAPL) Apple Watch and others.
Question to ponder: Why doesn’t Garmin dominate today’s smartwatch market? Smartwatches are computers. Relative to them, Garmin’s devices are like yesterday’s “feature phones”. They have a limited set of capabilities, and they don’t harness the power of a strong OS or strong processors. Garmin opted not to develop proficiency in these areas, choosing instead to stick to its core: specialized GPS devices (primarily) for a range of markets. But in today’s smart device world, that choice comes with a price.