Garmin sees its shares downgrading by analysts.
Apple Watch isn’t so worried about facing tough competition as much as the existing brands are worried about its entry into the market. It is the first smartwatch to create such hype in the industry and it obviously means something. Some companies have started to feel the impact even though the watch is weeks away from its launch. Garmin, a leader in the GPS fitness-watch business, has started to feel the weight already.
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According to the analysts at Citi, the strong position of the company in the industry will most likely burn to tatters under intense competition from Apple, Fitbit, and TomTom. In Monday’s note, Citi downgraded shares of Garmin to "Sell" and put a $42 price target on shares which closed last Thursday at about $46.50. This is a 16 percent decrease in the company’s shares since last year.
"The Apple Watch is a very modest threat this year as current interest in the running community appears low, but Apple’s product positioning, the likely addition of GPS and likely lower price points in future versions are significant long-term headwinds," Citi writes.
Last week a survey was conducted at the New York Road Runners 10K in Central Park and 37 of the total runners were found to be wearing a GPS watch. Below are the detailed findings of Citi from the survey;
“[Of] these 37 runners using a GPS fitness watch, 8 said they would buy the Apple Watch to train and/ or race (~20%), 19 said they would not buy it (~50%), while 10 did not know enough about it to have an opinion (~30%). The main reasons we heard from runners for not buying an Apple Watch to train and/ or race were 1) price point (the Apple Watch starts at $350 while a Garmin Forerunner starts at $130) and 2) the lack of built-in GPS as some runners object to taking their iPhones with them on a run. Interestingly, a triathlete said he would absolutely buy the Apple Watch, but would use it only to train; on race day, he would keep using his Garmin 310XT.”
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