- Garmin’s CEO Cliff Pemble mentioned the components crisis during Garmin’s quarterly earnings call with investors
- Garmin had a cache of components and memory bought cheaply before the crisis hit, but now it’s buying memory at “significantly higher” prices
- Pemble said pricing is “one of the things [Garmin] can look at”, referring to increasing device costs
If you want to pick up the best Garmin watch, you’d be wise to do it soon, because the company’s CEO Cliff Pemble has revealed that pricing changes aren’t off the table due to the rising costs of electronic components.
During the company’s quarterly earnings call, in which Garmin‘s C-suite speaks to its investors, CEO Cliff Pemble said that while the company is having a good year, he sees some headwinds in its near future.
The RAM crisis is a shortage of memory, as most of the available stock is being bought up to cope, in part, with the massive expansion of AI and the drive to build data centers. This leaves a shortage of memory for consumer devices such as computers and phones, which is driving up costs for device manufacturers.
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Wearables, which use comparatively little memory compared to a phone or a computer, have so far largely escaped unscathed. Even when Apple raised prices across the board, it didn’t do so for the Apple Watch Series 12 and Apple Watch Ultra 4. However, that reprieve appears to be over.
According to the transcript of Garmin’s Q3 earnings call, as published on The Motley Fool investment website, Pemble said that Garmin has been spared because it bought a lot of surplus stock at the old prices, but the company is now buying components at prices “significantly higher than last year”.
“Our results will soon reflect the higher cost of memory and other raw materials which have increased significantly since last year, driven by both high demand and limited supplies.”
Does this mean price increases?
Later in the call, Pemble said: “Definitely pricing is something that, you know, when I mentioned the mitigations that we can use, it is one of the things that we can we can look at.
“It is one of the tools that we have, but we do not overfocus on one particular thing, and we try to get the best balance of all the different ways that we can mitigate cost increases in our supply chain in order to achieve an outstanding result.
“I would probably just remind people that a little more than a year ago now, everyone was faced with higher supply chain costs really driven by tariffs. And that was something that we were able to navigate because of the diversity of our business and our vertical integration and our ability to create products that people want.”
It sounds like Pemble is hoping that Garmin’s diverse portfolio of products and services can offset an Apple-style price increases for its smartwatches and other gadgets, but he stopped short of ruling it out. We’ll have to wait and see what 2027 brings.
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matt.evans@futurenet.com (Matt Evans)
