Garmin's Got a Rough Road Ahead

SAN FRANCISCO -- In the past year, a leading maker of navigational gear has headed decidedly south.

Last year, GPS-based navigation systems maker Garmin(GRMN Quote) was flying high. The company's products consistently ranked at the top of electronics retail best-seller lists, it was highly profitable, and Wall Street took notice. Garmin's stock ended 2007 nearly 74% higher, while the Nasdaq Composite Index rose 9.5%.

But the company is facing a skeptical audience as it gets ready to report its second-quarter results Wednesday. Investors and analysts wonder whether it is able to differentiate itself in a highly competitive market and keep healthy margins in face of increased pricing pressure as customers clamor for cheaper devices. ...