Garmin 2009 Annual Report Download - page 37

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Competition
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Themarketfornavigation,communicationsandinformationproductsishighlycompetitive.Garmin
believestheprincipalcompetitivefactorsimpactingthemarketforitsproductsaredesign,functionality,quality
andreliability,customerservice,brand,price,time‐to‐marketandavailability.Garminbelievesthatitgenerally
competesfavorablyineachoftheseareas.
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GarminbelievesthatitsprincipalcompetitorsforportableautomotiveproductsareTomTomN.V.and
MiTACDigitalCorporation(“MiTAC”)(whichdistributesproductsunderthebrandnamesofMagellan,Mio,and
Navman)andNavigonAG.GarminbelievesthatitsprincipalcompetitorsforoutdoorproductlinesareMagellan,a
subsidiaryofMiTAC,LowranceElectronics,Inc.,asubsidiaryofNavico(“Lowrance”)andDelormeandthatits
principalcompetitorsforfitnessproductsareNike,Inc.,PolarElectroOy,SuuntoOyandTimexCorp.Formarine
chartplotterproducts,GarminbelievesthatitsprincipalcompetitorsareRaymarineLtd.(“Raymarine”),Furuno
ElectronicCompany(“Furuno”),andSimradandLowrance(subsidiariesofNavico).ForGarmin’sfishfinder/depth
sounderproductlines,GarminbelievesthatitsprincipalcompetitorsareLowrance,Raymarine,theHummingbird
divisionofJohnsonOutdoors,Inc.,andFuruno.ForGarmin’sgeneralaviationproductlines,Garminconsidersits
principalcompetitorstobeHoneywell,Inc.,AvidyneCorporation,L‐3AvionicsSystems,RockwellCollins,Inc.,
UniversalAvionicsSystemsCorporation,CheltonFlightSystems,AspenAvionics,andFreeFlightSystemsforpanel‐
mountGPSanddisplayunits.ForGarmin’sFamilyRadioServiceandGeneralMobileRadioServiceproductline,
GarminbelievesthatitsprincipalcompetitorsareMotorola,Inc.(“Motorola”),CobraElectronicsCorporationand
MidlandRadioCorporation.GarminbelievesthatitsprincipalcompetitorsforsmartphonesareApple,Inc.,HTC
Corporation,NokiaOyj,SamsungCorporation,SonyEricssonMobileCommunicationsAB,Google,Inc.,Motorola,
LGElectronics,Palm,Inc.,andResearchinMotion,Ltd.
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ResearchandDevelopment
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Garmin’sproductinnovationsaredrivenbyitsstrongemphasisonresearchanddevelopmentandthe
closepartnershipbetweenGarmin’sengineeringandmanufacturingteams.Garmin’sproductsarecreatedbyits
engineeringanddevelopmentstaff,whichnumbered1,969peopleworldwideasofDecember26,2009.Garmin’s
manufacturingstaffincludesmanufacturingprocessengineerswhoworkcloselywithGarmin’sdesignengineersto
ensuremanufacturabilityandmanufacturingcostcontrolforitsproducts.Garmin’sdevelopmentstaffincludes
industrialdesigners,aswellassoftwareengineers,electricalengineers,mechanicalengineersandcartographic
engineers.GarminbelievestheindustrialdesignofitsproductshasplayedanimportantroleinGarmin’ssuccess.
Onceadevelopmentprojectisinitiatedandapproved,amulti‐disciplinaryteamiscreatedtodesigntheproduct
andtransitionitintomanufacturing.
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BelowisatableofGarmin’sexpendituresonresearchanddevelopmentoverthelastthreefiscalyears.
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
December26, December27, December29,
2009 2008 2007
($'sinthousands)
Researchanddevelopment $238,378 $206,109 $159,406
Percentofnetsales 8.1%5.9%5.0%
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ManufacturingandOperations
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GarminbelievesthatoneofitscorecompetenciesisitsmanufacturingcapabilityatitsShijr,Jhongliand
LinKou,Taiwanfacilities,itsOlathe,Kansasfacility,anditsSalem,Oregonfacility.Garminbelievesthatits
verticallyintegratedapproachhasprovideditthefollowingbenefitswithrespecttoallproductsotherthanthe