• Newsweek, Wednesday, November 14, 2007 10:45 AM

Fewer than one in 10 American drivers currently use satellite navigation systems, but that ratio is set to rise sharply. Fueled by sharp price declines, unit sales of global positioning satellite (GPS) devices grew by 235% last year, according to NPD Group.

Garmin Ltd.--the country's leading seller of devices that use GPS technology, faces challenges even as its wares head toward iPod-like ubiquity. Competitors are rolling out cheaper devices that offer the same basic functionality. Cell-phone manufacturers are adding GPS to handsets, and consumers may lean toward carrying one lower-cost gadget. Garmin also faces tough choices as competitors buy up the map suppliers that are critical to GPS devices.

Garmin's executives say that by continually upgrading their devices, they'll be able to defend their premium position, the same way Apple's iPod outsells lesser-known, less-expensive MP3 players. It has reinforced this message by using advertising taglines like "Grab a Garmin" and "Give a Garmin," which try to cast its name, like Kleenex, as a generic term for the entire product category

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