Asus Reworks Mobile Partnership with Garmin

The Taiwan-based computer maker, which had been selling co-branded smartphones under the Garmin-Asus name since early 2009, will market its new Android-based phones solely under the Asus name. However, Asus handsets will use Garmin's navigation software.

"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", said Benson Lin, general manager of Asus's personal mobile devices business.

Both companies had worked together to distribute location-centric handsets under the Garmin-Asus brand in the initial partnership, which was announced in February 2009. The joint venture released seven handsets, including the Nuvifone G60 and M20 and, more recently, the A10 for the Indian market.

But the partnership failed to deliver satisfying business volume. The co-branded smartphones had generated only $27 million in revenue during the second quarter of this year, compared with with Apple's iPhones, which snagged $5.33 billion in the same period.

The two brands also had differing views of the handset industry that set the companies at odd with one another. Garmin was focused on identifying unique selling points for the phones while Asus valued speedy development, according to Jonny Shih, Asus' chairman.

With the reworked partnership agreement, the companies will be able to focus on their strengths -- software for Garmin, who is the top maker of navigation devices in the U.S., and hardware for Asus -- while still collaborating together. Asus will have the exclusive right to preload Garmin's software on its phones, though Garmin is free to sell its navigational services elsewhere, such as in mobile applications stores.

"Bringing phones back under the Asus name will give us a complete product portfolio", Shih said. "We are developing the software now and have already reorganized our engineers so our phone and tablet teams can collaborate more closely".

Asus is also revamping its internal sales and marketing teams and considering renaming its phone line to "Eee Phone" to match its other products.

The integrated marketing approach could improve distribution in the U.S., where its handsets are less well-known than its computers and netbooks.

By reworking their partnership with Garmin to market more products under the sole Asus name, the computer maker will continue to build its presence and portfolio as an overall hardware brand.