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UPDATE 1-Garmin, Asustek in new phone cooperation

* Asustek to launch own-brand smartphones in January

* New Android phones will use Garmin’s navigation software

* Asustek shrs end down 2.85 pct, vs TAIEX’s 0.44 pct gain (Adds quotes and details)

BANGALORE/TAIPEI, Oct 26 (Reuters) - U.S.-based Garmin GRMN.O and Taiwan's Asustek 2357.TW announced new cooperation strategies on mobile phones on Tuesday, with Asustek launching its own-brand smartphones from next year.

Asustek, which had been selling smartphones under the Garmin-Asus brand since early 2009, will not introduce new co-branded handset models in the future, while Asustek’s new Android-based phones will use Garmin’s navigation software.

In September, Garmin, the No. 1 U.S. maker of personal navigation devices (PNDs), told Reuters it will determine during the next couple of quarters the future of its struggling smartphone unit, noting it is ready to exit the business if it does not achieve success. [ID:nLDE6881WD]

For Garmin, the smartphone exit could improve its earnings and ease the investments it’s been making to take a role in the competitive smartphone market.

“We are moving from co-brand to brand cooperation, and we will use Garmin’s solutions in our new Android phones exclusively for a couple of years,” Benson Lin, general manager of Asustek’s personal mobile devices business, told reporters in Taipei.

“It (Garmin) will be a very close partner,” said Lin, who declined to give shipment forecasts of the firm’s new smartphones next year.

However, Garmin said it will continue to sell and support models that have already been introduced to the market, and plans to offer navigation and other applications through certain consumer application stores.

Analysts say Garmin could now be at liberty to pursue the business of selling navigation applications for the iPhone and Android devices. Its Dutch rival, TomTom TOM2.AS, offers an application for the Apple AAPL.O iPhone. (US$1=T$30.6) (Reporting by Baker Li; Editing by Ken Wills)