Garmin Ltd.’s (GRMN - Free Report) unit —Garmin International Inc. — has partnered with Daimler AG, maker of the popular Mercedes-Benz cars to incorporate its wearable technology into the latter’s vehicles.
Per the deal, Daimler will introduce a Mercedes-Benz branded version of the Garmin vivoactive 3 GPS smartwatch which will focus on the driver’s vital health metrics.
The latest deal will help Garmin further expand its share in the wearables market, and fend off competition from players like Fitbit (FIT - Free Report) , Apple (AAPL - Free Report) and Alphabet (GOOGL - Free Report) , among others.
Coming to share price, shares of Garmin have gained 6.4% in the past one year, outperforming the industry’s decline of 19.3%.
More in the headlines
With the deal, Garmin aims at providing various health parameters to Mercedes-Benz drivers. On connecting the smartwatch to the Mercedes me mobile application, it will monitor features like stress levels and heart rate data, enabling the user to know about its wellness data.
Apart from giving important health data like heart rate and driver’s stress level, the GPS smartwatch will be modified for Mercedes-Benz customers with custom branded materials and display screens. In addition to all these, Garmin vivoactive 3 comes with features that include built-in indoor and outdoor sports apps, smart notification alerts and a contactless payment solution.
We note that these new connect features will likely help the company in attracting more auto makers to its wearable platform. This will improve the company’s clientele, driving its top-line growth.
Healthcare has been touted as the next most happening growth frontier for technology stocks. Increasing proliferation of wearables backed by virtual reality (VR) is helping address the mounting demand for healthcare applications, both from consumers and healthcare professionals.
In fact, wearables have become the most convenient way to track fitness. These smart wearable sensors not only aid in health monitoring but also in data analysis.
According to Markets and Markets, the global market for medical wearable devices is projected to reach $12.1 billion by 2021.
Notably, Garmin is beefing up initiatives in order to cash in on the growing trend. Management has gradually built the product portfolio for its fitness business, through both internal development efforts and acquisitions.
We believe strength in this segment will continue to be driven by focus on location-enabled wearables and growing engagement on the Connect IQ App store.
Zacks Rank & Stocks to Consider
Garmin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
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