Garmin buying Raymarine, for real?????
This is starting to get serious! While this Reuters article also notes Garmin’s disclaimer that “there was no certainty an offer would be made”, yesterday Garmin had no comment at all. Personally I have no knowledge of this deal whatsoever, and can tell you that the product people I know at both these companies seem to be full speed ahead. But I’m starting to monitor the financial news closely. Somewhat strangely, the most complete and original reporting seems to be coming from a Reuter’s guy in Bangalore, India; his piece yesterday helped me understand why this acquisition might make sense for Garmin: Foreign distribution and an “OEM footprint” (in case the boatbuilding business ever comes back to life). But how would the product lines be “rationalized” and what would a big Garmin/Raymarine combination mean to the relatively little recreational marine electronics industry? Let’s discuss.
Can you focus the question, I can’t think of a general answer.
Is the segment the not so small marine industry segment of boats that have depth, speed, wind, a couple of displays, an autopilot and a handheld GPS (or cell phone equivalent)? A segment that incorporates a wide variety of boat sizes, many of which come with a set of ST instrument displays ?
Seperate that from the smaller market that purchases charplotters, radar, fishfinders, and AIS ?
Dan, I think the whole ball of wax — let’s define it as all dedicated marine electronics that actually gets installed in boats, plus specifically marine software — is a relatively small industry.
Note that in yesterday’s Reuter’s piece, linked to above, analyst Yair Reiner “…estimates that Raymarine and Garmin’s marine segment enjoyed similar revenue levels and a market share of about 30 percent each in 2008.”
I’m not sure those figures are correct, or how Reiner exactly defines the market, but still wouldn’t it be a significant change to suddenly have one company with the majority of that market?
Garmin is loaded with cash; Raymarine owes a bundle. Garmin has terrific backround in small-boat devices; Raymarine emerged from Raytheon which focused on big systems. Garmin is a great marketer (listens to markets, delivers what markets want); Raymarine arrives late and talks over the market conversation. Garmin radiates good health and profitability; Raymarine wears the bandages of the severely wounded. But opposites often attract. And marriage looks like Raymarine’s last chance for a happy life. But the “dowry” better be low or Garmin will find another bride.
I’m bummed. The rivalry between Garmin and Raymarine accelerated product development and generally improved the breed at a remarkable rate, almost approaching the generation race among cell phones! With a majority of the market, no CEO is going to continue to pour money into R&D, and might even scale back customer service!
Look at what the Grocery-chain-mentality has done to the Navico ‘family’; their dwindling market share (entirely due to customer non-support) is throwing up red flags at dealers, market watchers and investors alike.
Garmin is an engineer’s company; without the challenge of one-upping Raymarine, some of that talent may go some place else more interesting.
or not: I’ve been wrong b4!
Both have poor tech support in my limited experiences. Ray’s GUI sux big time on their C and E series. Don’t know the Garmin equivalent, but I suspect it’s not much better.
Monopolies are never a good thing, but if I ever get another MFD, it won’t be Ray.
Garmin seems to make more reliable gear.
What Sandy said . . . I want my old Simrad back!!
I’m with Sandy: I’d be sad if this happened. Competition makes everyone and everything better: both product innovation and support would most likely suffer, and price of equipment and parts may increase.
What will this mean for support of existing products?
Garmin has certainly made inroads into Raymarine’s territory during the last five years, and I think that has made the marine electronics market much stronger on all fronts. It’s nice to have options.
long time listener, first time caller…
On all the blogs (both financial and commercial)there is one word that i have not found yet, NAVICO which surprises me. Alot of talk everywhere about RAYMIN possible marine giant potentiality gainng say 50% market share, how good a price this could be etc etc etc.
I would like to hear comments on what people think NAVICO’s position would be on this deal…
I even read Brunswick looking at it, tomtom,(both struggling as it is – though a good deal is a good deal) smaller manufactures, other major electronic manufactures and a private consortium.. These all seem to valid, are they real?
Im all for RAYMIN personally, being a long product seller of GARMIN and recent share holder of both.
all i want is any sort of n2k aware MFD with various 16:9 touch screen sizes and ndependent DVI and USB inputs… is that so wrong?
what they going to call the new company…..GAYMARINE 🙂
What we’re seeing here with Raymarine, Garmin and all the brands now swept under the Navico umbrella is consumer marine electronics at its best. The quality found in Simrad and Northstar of yester-year is no longer available from these brands as the now consumer mentality of mass sales at low prices grips the market. It’s bad news because marine electronics is the one area where quality and after sales service is rather important….to me anyway!
I would be suprised if Garmin goes ahead with the purchase. Reading the reports I see that Raymarine has almost GBP100M worth of debt and and overstated balance sheet. Their share price “lept” over night to all of 16 pence despite the news of a buyout! It was 350 pence not too long ago! At the same time Garmins shares dropped so one wonders just how the market is going to react if the buyout goes ahead. From a consumer and dealer perspective I see no benefit, just look at Navico with their mult-branded offer which appears to be going nowhere.
With debt facilities stretched to the limit, a banker that’s not willing to increase the facility in a time where all boat builders and related industries are doing it very tough who can blame them? If Garmin does not buy Raymarine it looks like they will go broke anyway.
The size difference between these two companies is amazing. These negotiations must be a big deal for Raymarine, but for Garmin, not so much…
Its easy to recognize a fellow dilettante in Mr. Ogg’s article you just linked, Ben; a facile tongue and no more than a superficial knowledge of the subject! Raymarine may be a small company but it would leave a huge vacuum in our little market. SOMEONE will keep the doors open! Walk down any dock in the US and count the Raymarine Instruments. This is a huge market share, buoyed by the fact that most sailors and many power-boaters are quite conservative, and are most likely to stay with a brand they are used to, that “matches the screw holes in their bulkheads.”
I’m sure that every word we hear about this deal will be barter maneuvers and posturing until a deal is struck.
The idea of “rationalizing” a product line is infuriating. I’m stuck with this image of customers being lined up in order by cash in their pocket, and sent to a single product with nothing else to choose from. Or a Grocery Chain concept, where there are three choices: the cheapest on the bottom shelf, and the best at eye level, and all store labels on sale this Thursday.
Better a marriage of convenience than the death of the potential bride.
Raymarine makes beautiful stuff but they are, IMO, over priced. If cost is not an issue Furuno is a better product. Navico seems to be doing much better after several months of sorting out customer service issues.
I see this as a win for the marine electronics consumer. Better products, good customer service, more reasonable prices all with a broader selection will be a plus.
Although I’m not excited to see it happen, it makes perfect sense. Ray has strong distribution where Garmin does not so it buys growth for Garmin where they cannot easily get it and makes them the undisputed leader. Garmin is cash rich and Ray’s value is depressed right now, good time to buy. Ray’s management would probably love to cash out.
The product line rationalization will be ugly and I think as consumers we will suffer. I would see Garmin owning the consumer segment and Furuno owning the commercial business while Navico plays a distant third in some niche markets.
I’m sure Ray would like to get Navico into the game and create a bidding war but I think they’ve already got more product lines than they can manage. Private equity is not in a strong position right now so I’m pretty doubtful that Navico could put forth the cash for yet another acquisition.
Ultimately this would be a good thing as Garmin is a well run company, but in the short term (3-5 years) a lot of popular products are going to bite the dust. Since market leaders usually get lazy it will also clear the way for some entirely new companies to innovate and emerge to challenge the big dog.
Both Raymarine and Garmin have made impressive advances in their offerings, giving the average boater reason to perform wholesale upgrades on their marine electronics and move up from a standard speed / depth / autopilot / handheld GPS configuration in order to:
1. Improve the safety of their boating
2. To best optimize the limited time many people have for their boating experience
With the economy what it is, rather than making wholesale upgrades I expect boaters will make incremental changes that will favor Raymarine, given their recent product innovations and market share.
1. Raymarine chartplotters can deliver the above benefits in an upgrade while reusing most of the existing electronics and wiring on a boat. The installed base of Seatalk-1 product is especially advantageous to Raymarine.
2. The ST70 product has yet to be discovered by most people, but is a great single component upgrade to existing Seatalk-1 systems, and once purchased, I believe buyers will seriously consider more marine electronics upgrades in Raymarine’s favor.
3. The base of dealers and installers in the marine electronics industry is not healthy. Real road blocks exist not just for new entrants to get access to this base of talent, but many existing vendor products and product lines are facing defection from the base as their pool of talent is shrinking. While this base shrinks overall, Raymarine will continue to gain an increasing proportion of what�s left of this base, as choices will be rare to drop the Raymarine product line over another when there isn�t enough training dollars or qualified people to keep up with technology advancement. I believe this will put Raymarine in a better position with recreation segment, while also taking commercial market share from Furuno and others, as dealers that have only one recreational line and one commercial line, may choose Raymarine to serve both industry segments.
All good things for a potential buyer, but I think there is a another real option for Raymarine, and I am surprised it�s not being talked about either for or against by analysts. That would be for Raymarine debt-holders to swap debt for common stock. Such a swap has a valuable upside for debt holders (and shareholders), that won�t take long to realize, given the many positive attributes of Raymarine.
Garmin might also benefit from re-introducing themselves to the small but vocal group of NMEA member installers who have in the past steered customers to other brands, probably for reasons having to do with price competition from non-brick and mortar suppliers.
It makes sense if you look at why Garmin Bought TR-1. They tried for years to develope an autopilot that could perform so they just bought one. TR-1 was a great little company with top notch customer service.
Rayamrine offers alot of products that Garmin would like to offer but R&D is expensive. So again buy it.
Raymarine has its hooks into the boat manufactures and Garmin does not. So why not just buy their way in.
Garmin needs a expanded distribution capabilities so…..
Its a no brainer for Garmin.
When they bought out TR-1 it took well over a year to integrate that little company into Garmin as to not affect the reputation of TR-1 and Garmin. So that being said I am sure Garmin would not be foolish enough to do what Navico did.
I do strongly agree that it could stagnate the developement of future technologies and since there is less competition prices could increase on future products.
I think there is a tendency to perhaps under estimate NAVICO capabilities to bring new technology to market and to provide Garmin with real competition.
Despite early failures in integrating it’s various lines smoothly NAVICO appears poised to pick up a greater market share in the near term.
A question. Is there really any technology development for this market?
Or are the sellers just repackaging technologies developed by and for others and adding a price premium for “marine.” Perhaps NMEA 2000 is unique, but it’s just a data protocol and there is nothing specifically marine about it.
I can’t think of anything unique to this market in decade (and I work in the ocean sciences IT business)
I don’t think we have to worry about tech, we have to worry that the “West Marine phenomenon” — less choice and monopoly price creep will keep tech-supported boating a rich persons game.
Pehaps it means nothing, but it seems odd to me. For about 6 months I have tracked Garmins corporate website tracking their job openings. I live in Kansas City where they are based and was interested in applying for a marine related job. In 6 months, not one job posting related to marine has been made. Tonight there are 57 openings and this is about normal lots of jobs for aviation and handheld GPS units but no marine. Reading the tea leaves I did not think this points to them wanting to grow their market share, product offerings, ect. So a Raymarine purchase made since to me.
Ben; Garmin has finally started shipping the VHF200 FM communications transceiver. I received 2 this week and installed the 1st last night in my comm center and the 2nd today at the helm. My first impressions it is an easy radio to program. I has some interesting scan features. One I like is you can change your secondary primary from channel 9 to anything you desire. It has a great scan and stops long enough to get both sides of the conversation. Now the interesting part the NEMA2000 made installing these on my Garmin network a snap. I have already played with the DSC function and it integrates perfectly with my Garmin 4212 and 4210 plotters. Programming the MMSI is a snap and you must enter it twice making entry mistakes almost impossible. The receiver sensitivity seems excellent. I have not hooked it up to my service monitor or SINAD meter but listening to the 1st installed unit against the Lowrance LVR880 that was on a 16′ whip the Garmin has an 8′ whip it appeared to pick up distant weather stations better. Not exactly a scientific test but a decent one. The Lowrance was replaced today by the second VHF200. I had a Uniden625M that I replaced with the 1st installation in my boat and it beat the scan features hands down over the Uniden. All in all this looks to be a well thought out radio and the N2K is fully functional. I would be interested in what you think of one if you get the chance to use or test one.
Regards Bill Lentz
1993 Mainship 40 SB
I’ve been installing marine electronics for a long (35 years) time. I am 54 yr’s old. It is not that difficult. Raymarine products are a sore spot with me. They do not check their workmanship well resulting in approximately 50% of their electronics being dead out of the box. Garmin products do not have this problem and I have never had a Garmin unit fail other than when the boat owner is to lazy to upgrade the software and the unit requires recalibration every time it is turned on. To hear that Garmin may be buying Raymarine makes me feel hopeful that someone may be going to fix the issues at Raymarine or erase it from the map & use there distribution network to do it. The new Garmin interface is a brilliant concept & it deserves to become the industry standard. Now, if we can just get someone at Garmin to consider the concept of hardware upgrades using the same wiring (like Furuno is planning to introduce with its flat screen replacement program this fall-09) – Bill