Garmin’s New Forerunner Smartwatches: A Growth Engine or Pricing Pitfall?

The Garmin Forerunner 570 and 970 smartwatches are here, and they’re poised to redefine endurance sports tech—if Garmin can navigate the storm of rising tariffs. These devices combine cutting-edge features like titanium builds, ECG monitoring, and solar charging with a price tag that could alienate budget-conscious buyers. Let’s dissect whether this is a buy or a bust for investors.

The Premium Play: Why Garmin Could Dominate

Garmin’s new Forerunner duo isn’t just another gadget—it’s a strategic masterstroke. The Forerunner 970 ($499.99) targets elite athletes with a solar-charging titanium build, topographic maps, and advanced health metrics like blood oxygen and ECG monitoring. Meanwhile, the Forerunner 570 ($349.99) offers a stripped-down yet robust package for casual runners, with 12-day battery life and GPS accuracy.

Why this works:
- Ecosystem Stickiness: Garmin’s software ecosystem—garmin connect™, training plans, and third-party app integrations—locks users into its platform. The 970’s live metrics display and smartphone connectivity further cement its lead over rivals like Suunto or Coros.
- Niche Dominance: Endurance athletes and multisport enthusiasts are willing to pay a premium for reliability. Garmin’s 30+ day battery life on the 970 (with solar) is unmatched, making it a must-have for ultramarathons or Ironman events.
- Health Tech Crossover: ECG and blood oxygen sensors aren’t just for pros—they’re now standard on Garmin’s premium models, appealing to health-conscious consumers.

The Tariff Trap: Risks to Watch

Here’s the catch: $100 million in tariff-related costs could derail this strategy. U.S. tariffs on Taiwanese-made goods (Garmin’s manufacturing hub) are a ticking time bomb:

• Tariff Volatility: Garmin assumes a 10% tariff rate in its 2025 projections, but if U.S. tariffs on Taiwan revert to 32%, costs could skyrocket. The Forerunner 970’s premium price might have to jump to $550+, pricing out casual buyers.
• Competitor Surge: Cheaper rivals like Xiaomi’s Amazfit ($100–$200) and Fitbit’s Versa 4 ($150) are gaining traction. Garmin’s 25% U.S. revenue dependency on tariff-hit imports leaves it exposed if price-sensitive buyers defect.
• Margin Pressure: Garmin’s Q1 2025 earnings showed 11% revenue growth, but tariffs forced a stock price drop of 10% post-report. Investors are already nervous about margins—if the 970’s gross profit dips below 40%, this could be a red flag.

The Bottom Line: Buy, But Keep an Eye on the Tariff Cloud

Recommendation: Buy Garmin, but with a caveat.

• Why Buy Now?
• The Forerunner 570/970 launches coincide with a wearables market rebound, projected to grow at 9% annually through 2027.
• Garmin’s Q1 2025 Fitness category revenue rose 12%, driven by smartwatch sales. The new models could supercharge that trend.

• No direct competitors match Garmin’s endurance-specific features. Even Apple’s Watch lacks solar charging or titanium builds.

• The Catch:

• Monitor Garmin’s Q2 2025 gross margins. If they dip below 45%, it signals tariff costs are eating into profits.
• Track U.S.-China tariff negotiations—a 90-day truce expires soon, and a tariff hike could force price cuts or margin sacrifices.

Final Verdict: Garmin’s Future is Bright, but Cloudy

The Forerunner 570/970 are winners in their niche, but Garmin’s fate hinges on tariff management. If it can keep prices steady while rivals falter, this stock could soar. But if tariffs force a price war, investors might need to bail. For now, buy, but stay glued to those margins.

Action Item: Buy GRMN now, but set a 20% trailing stop-loss if tariffs or margin warnings emerge. This is a high-reward, high-risk bet—perfect for growth investors with nerves of steel.