-J

Amnon

Landan ofMercury Interactive

54.99/

CANADA

$6.99

Garmin

Found:

Kao of Garmin Ltd.in Olathe, Kans. (North, 38degrees,

51.333

minutes;West,

degrees,

47.941

minutes).Users of its

GPS

receiversnever have to askfor directions.

Takinby Hand

Garmin rules

the hot

GPS business. But

for

how long?

ARIK

HESSELDAHL

NLESS YOU'RE

PILOT,

AVID

hiker or hunter, or own a carwith a navigation system, youmay not have noticed that oneof the fastest-growing sectorsin the otherwise chilly technology business is gadgets to help lost people figureout where they are.Sales of Global Positioning System, or

GPS,

receivers—in

handheld devices, cars,planes and

boats—will

reach $4.7 billionin North America this year and more thandouble by 2008, according to researchfirm Frost & Sullivan. What began as away for missiles and troops to peg theirlocations to within

feet—American

taxpayers paid the $15 billion bill to launchthe 27

GPS

satellites that orbit

11,000

milesabove the Earth and help pinpoint terrestrial

locations—has

become a playthingfor the leisure class. Civilian GPS usersnow outnumber military ones 100-to-l.The greatest financial beneficiariesof this giant public works project aretwo folksy engineers: Gary Burrell andMin Kao, the founders of Garmin Ltd.of Olathe, Kans. Garmin's easy-to-usedevices are the closest thing the GPSworld has to Windows. And Garmin'sBurrell, 66, now retired, and Kao, the54-year-old chief execu

tive,

are a mini PaulAllen and Bill Gates.Both made it ontoThe Forbes 400 for thefirst time this year, thanksto Garmin's remarkablegrowth through the techrecession. With the company's market value at arecent $4.5 billion, Kao isworth $970 million andBurrell, $810 million.Revenue is up 23% annually since 1996 to $465million this year. Profits,now at $142 million, havekept apace. Together Burrell and Kao control 45%of Garmin's outstandingshares (never a lick ofventure capital).Consumers scoopedup some 2 million GPShandhelds in 2002, morethan half of which wereGarmin-made. Thousandsmore bought Garmin'sdashboard-mountable receivers for their car, boator plane. Still more replaced the electronicsof their private planeswith the "Garmin stack,"a $25,000 set of cockpitinstruments that combines navigation andcommunications gear. Itsnew

G1000

cockpit systemreplaces all those clunkygauges and indicators with sleek flat-paneldisplays.But these are tricky times for Kao.Just as he is beginning to enjoy a taste ofthe mass market, he has to begin fending off the big electronics giants such asSony and Toshiba, which are licking theirchops at Garmin's 58% gross marginsand imposing market share. Prices forGPS chips have dropped from $100 per1,000 to $20 in the past five years. Sonyhas a GPS receiver built into its MemoryStick, aimed at users of its

Clie

hand

helds,

while Toshiba has done the samewith its Secure Digital cards.