Garmin issues global recall

Satellite navigation company Garmin is recalling approximately 1.25 million n"uvi personal navigation devices, due to a potential fire hazard.

The company says about 796 000 of the 1.25 million units were sold in the US, but the company has not yet commented on the effect of the recall on the South African market.

It explains that the affected devices contain batteries manufactured by a third-party supplier within a defined date code range and have a specific printed circuit board (PCB) design.

“Garmin has identified potential overheating issues when the third-party supplier's batteries manufactured within this limited date code range are used in certain Garmin devices with the PCB design. It appears that the interaction of these factors can, in rare circumstances, increase the possibility of overheating, which may lead to a fire hazard.”

Only the 200W, 250W, 260W, 7xx and 7xxT (where xxis a two-digit number) models may be affected, according to Garmin. These units were sold worldwide.

The company adds that this issue has been identified in less than 10 cases in total, involving the specific n"uvi models.

“None of the reported incidents have caused significant property damage and no injuries have occurred. Nevertheless, Garmin is proactively recalling n"uvi units with the specific PCB design and with batteries from the specific date code range, out of an abundance of caution.”

It has urged customers to go online to determine if their n"uvi device is one of the models affected by the recall and, if so, to participate in the programme.

To determine if a unit is affected, customers can visit the company Web site. “They will be asked to enter their n"uvi's serial number, and if their unit has the specific PCB design and contains a battery from the specific date range, they will be given instructions on how to return their n"uvi at no charge.

“Garmin will replace the battery and insert a spacer on top of the battery next to the PCB before returning the n"uvi to affected customers free of charge. Owners should not attempt to remove or service the battery on their own.”

The company adds that if customers are unable to access the Web site, they may contact Garmin telephonically. The numbers for Garmin in Europe, the Middle East and Africa are +44 870 850 1242 and 0808 238 0000.

“Garmin is making every effort to co-operate with customers, dealers, and regulatory agencies worldwide, and the company apologises for the inconvenience that this issue may cause.”

Garmin says it does not expect this recall to have a material adverse effect on its operations, financial position or cash flows.

“The battery supplier has agreed to share the cost of replacement battery packs and all other costs of the recall programme.”

World Wide Worx MD Arthur Goldtsuck says the recall shouldn't adversely affect Garmin's local market share.

“It's only a very specific model in a very specific range, so it shouldn't have a major impact on the existing customer base. However, it does give TomTom great fuel to market the advantages they have over Garmin. So it is a question of how TomTom leverage it in its marketing strategy, rather than of what actually happens on the ground to Garmin users.”

Earlier this month, TomTom VP of sales for Benelux (Belgium, Netherlands and Luxembourg) and sub-Saharan Africa, Joost Jetten, said the company hopes to increase local market share to 50% in the next two years.

TomTom currently has 30% annualised market share for portable navigation devices (PND) in SA, after two years of being in the local market.

According to CEO of Garmin distribution Africa Richard Fearon, Garmin's market position in the PND in-car device segment in SA for the year ended December 2009 was over 57% (unit volume sales out), and for the first six months of 2010 is much the same.

“Low-cost players have taken share from our major competitors over the last 12 months, whereas Garmin's share over the period has been trending upwards,” says Fearon. Garmin has a market share in excess of 90% in the outdoor navigation segment, he adds.

But Jetten feels it is possible for TomTom to attain a 50% market share in the next two years, if all goes according to plan. “First to market is something, but if all goes well it's possible.”

However, Goldtsuck says: “This target suggests that Garmin will have to lose a lot of market share and I don't think it's as easy as that.” He adds that the market share of both Garmin and TomTom will drop because of smartphones.

Craig Bowen, marketing manager for marketing services company GfK Retail and Technology, says: "While TomTom has managed to get a foothold and compete in the South African PND market, there is still a huge amount of investment needed to take away the leadership position from Garmin. Garmin is defending well against TomTom and continues to leverage its first mover advantage in the South African PND market."