Asustek-Garmin phones to go on sale in H1

BARCELONA (Reuters) - The head of Garmin said on Monday that the positioning-device maker and Taiwanese low-cost computer maker Asustek aim to have their first jointly branded navigation phones on the market in the first half of this year.

Garmin said earlier this month that it had dropped plans to enter the cell phone market on its own and would instead team up with Asustek to sell phones that pinpoint the user's location and offer corresponding services under the nuevifone brand.

Cliff Pemble, Garmin's president and chief operating officer, told Reuters in an interview that two smartphones -- one delayed from last year -- should go on sale in the first half of 2009.

"That's our target," Pemble said on the first day of the Mobile World Congress in Barcelona, the industry's biggest annual gathering, where the Garmin and Asustek showed off their newest, G60 model.

Garmin, the biggest U.S. maker of navigation devices, is suffering from rapidly falling prices for satellite navigation gadgets, while Asustek last week gave modest sales targets for this quarter, after falling into the red in the previous quarter.

Smartphones, which have computer-like capabilities, are one segment of the phone market still expected to grow this year. However, competition from established players such as Nokia will be fierce, and other new players are entering the market.

Most new mid- to high-end phones already come with global positioning system (GPS) chips and software built in and offer many of the services such as information on local services or the location of friends that the nuevifones do.

However, Pemble said that the ease of using the Garmin-Asus phones, with their pre-loaded maps and the way that location-based services were woven into such standard features as contact books and Web search, would give the nuevifones an edge.

"We believe we have a unique and differentiated device," he said.

Pemble and Asustek's personal mobile business unit president, H.C. Hung, declined to say which operators would first offer the nuevifone in which territories, saying it was up to the operators to make those announcements.

They said Europe, North America and Asia, including China, were all key target markets.

Pemble also said they aimed to bring out a phone based on Google's Android operating system toward the end of the year.

Currently, the G60 runs on open-source Linux software and the second phone, the M20, uses Microsoft Windows.

Most of the nuevifones have Qualcomm processor chips based on ARM chip design architecture, Hung said.

(Reporting by Georgina Prodhan; editing by Karen Foster)