Garmin Needs a Deal -- Here Are Some Candidates

But its not all hype. Dash is expected to start shipping it first product, Dash Express, this quarter. Think of Dash Express as a Garmin GPS unit on steroids.

Dash Express is connected to the Internet so users can search for local businesses, restaurants and other destinations. It can even send an address to their Dash unit in the car, ahead of time, from their home or work computer browser.

Dash can also offer better routes than most GPS devices on the market. That's because Dash takes traffic information from Inrix and layers it on top of real-time traffic data that will be transmitted by other Dash devices on the road. The idea is that as more people use Dash, the service gets better and stronger.

The best feature of the product, though, is the integration of local search thanks to Dash's partnership with Yahoo(YHOO Quote).

Users of the device can find anything on the go because, unlike other GPS devices such as those from Garmin that come loaded with a static database, Dash systems can scour the Internet in real time for information.

Dash, which has about 88 employers, has raised $42 million in venture funding.

TeleNav

With the entry of Nokia into the GPS navigation business, investors have been increasingly worried about competition from cell-phone-based navigation systems.

TeleNav, founded in 1999, could be the answer for Garmin. The company was among the earliest firms to offer voice and onscreen driving directions on phones, turning the ubiquitous cell phone into a navigation device.

TeleNav has relationships with all the major carriers including AT&T(T Quote), Sprint(S Quote) and Qwest(Q Quote). Subscription to the company's service ranges from $5.99 per month for 10 trips to $9.99 per month for unlimited usage.

Some industry watchers, though, are skeptical about the company's long-term prospects. "They have had some phenomenal growth here, but I don't think in the future carriers can continue to play the role of the gatekeepers," says Jonathan Spinney, a location-based services expert and vice president of business development for the Voice-over IP company Sonim Technologies.

A Garmin-TeleNav relationship could help the two companies be a stronger force. TeleNav, which has 350 employees, has raised $52 million in funding.

Networks In Motion

TeleNav's competitor Networks In Motion is much younger, having started in 2000. But it is among the fastest growing companies in the segment.

In October, Networks In Motion said its location-based services platform that offers turn by turn directions through the phone and local search has more than 2 million paid subscribers.

Last month, Neilsen Mobile said the company led the industry in the third quarter, garnering 53% of the revenue from the top four U.S. carriers in the U.S.

Networks In Motion, which has 109 employees worldwide, has raised $16 million.

Facet Technology

For the last four years, Facet Technology has quietly captured imagery of thousands of miles of roads across the U.S. to build its own database of navigation information and street-level imagery. Facet's data was used to create Microsoft's Virtual Earth application.

In November, Facet said it will enter the mapping data business for the U.S., offering features such as street-level imagery, 3D roadways and signage.

"In light of what is happening with the ownership change with TeleAtlas and Navteq, 3D imagery and road-map data are becoming very important, and Facet could become an alternative to Navteq and TeleAtlas," says Phil Magney, principal analyst with the Telematics Research Group.

Facet, founded in 1998, hopes to soon expand its effort to Canada and Europe. Buying this company could help Garmin create its own parallel mapping database to rival those of its competitors. The company is privately financed and has about 50 employees.

Bonus Play: VoiceBox

The Bellevue, Wash- based VoiceBox could take away the hassle of punching an address into the keypad of a Garmin device while driving. Founded in 2001, the company is one of the innovators in natural language processing, and it has developed software that makes it easier to search and navigate digital content.

With VoiceBox technology embedded into a Garmin box, users can just give out the address that device will instantly recognize.

For example, a user can say, "Where is the nearest pizza parlor or Starbucks?" and have the results pulled up on their system.

Natural language processing is a complex technology that Garmin could use to make its systems even more user-friendly.