Kerri Thurston - IR Dr. Min Kao - Chairman and CEO Cliff Pemble - President and COO Kevin Rauckman - CFO and Treasurer Andrew Etkind - General Counsel

Rich Valera - Needham and Company Ron Epstein - Merrill Lynch Amer Rosolowsky Aaron Husock - Morgan Stanley Yair Reiner - Oppenheimer & Company Jeff Evanson - Dougherty & Company LLC Peter Fritzler Jim Duffy - Thomas Weisel Partners Bennett Notman - Davenport and Company Scott Sutherland - Wedbush Morgan Securities Jeff Rath - Cannacord Adams

Good morning, my name is Leticia and I will be your conference operator today. At this time I would like to welcome everyone to the Q1 2008 Earnings Call for Garmin Limited Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). Thank you. Ms. Kerri Thurston, you may begin your conference.

Thank you. Good morning. We would like to welcome you to Garmin Limited's first quarter 2008 earnings call. Please note that a copy of the press release concerning this earnings call is available at Garmin's Investor Relations site on the internet at www.garmin.com/stock. Additionally this call is being broadcast live on the Internet. Please note that this webcast does include slides which can be viewed during this call. An archive of the webcast will be available until May 30th, 2008. A telephone recording will be available two business days following this call, and a transcript of the call will be available on the website within 48 hours at www.garmin.com/stock under the Events Calendar tab. This earnings call includes projections and other forward-looking statements regarding Garmin Limited and its business. Any statements regarding our future financial position, revenues, earnings, market shares, product introduction, and future demand for our products, products and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this earnings call may not occur, and actual results could differ materially as a result of risk factors affecting Garmin. Information concerning these risk factors is contained in our Form 10-K for the fiscal year ended December 29, 2007, filed with the Securities and Exchange Commission. Attending the call this morning on behalf of Garmin Limited are Dr. Min Kao, Chairman and Chief Executive Officer; Cliff Pemble, President and Chief Operating Officer; Kevin Rauckman, Chief Financial Officer and Treasurer; and Andrew Etkind, General Counsel. The presenters for this morning's call are Cliff Pemble and Kevin Rauckman. At this time, I would like to turn the call over to Cliff Pemble.

Good morning and welcome to our Q1 call. As you've read from our press release this morning, Garmin has achieved another record quarter of revenue and earnings. Financial highlights from Q1 include revenue growth of 35% to $664 million with the strong double-digit growth across all business segments, strong gross margin of 48.2% which was essentially flat year-over-year but increase sequentially by over 600 basis points from Q4. We also achieved strong operating margins of 26%, which was better than expected. As a result our operating income grew 25% to $173 million for the quarter and earnings grew 17% to $0.69 per share excluding the effects of foreign currency. Some notable business highlights for the quarter. We maintained our strong market position in the US and increased market share in Europe, which further solidifies our worldwide leadership position in the PND market. We announced the nüvifone early in the quarter, which has generated significant interest in both carriers and resellers around the world. We delivered innovative new devices to the market like our H series, which features a color display and detailed street level maps with automatic routine tailored to cyclist. We also delivered the new Colorado series, which offers innovative new features for the outdoor markets such as 3D, topographic map, presentations, and wireless data transfer between devices. And we completed the acquisition of our Danish distributor, the fifth distributor acquired to date and consistent with our strategy to improve European market share and presence. We are pleased to report healthy double-digit revenue growth in every business segment. In the Automotive and Mobile segment revenues grew 43% as the unit volume more than doubled resulting in improved European market share and continuation of the global market leadership we established in 2007. Aviation revenues grew 19% with strong growth in both our retrofit and G1000 product lines. Revenues from the Outdoor/Fitness segment grew 16%, driven by recent product introductions. And finally Marine revenues grew an impressive 30% on a continued strength of our Network Chartplotter series and industry-leading, Vision Cartography System. Many of you are wondering how we view the current market and economic trends which have been emerging in recent months. The slowing of the PND market growth has been well established, with the US market doubling in size year-over-year and Europe growing at approximately 40% year-over-year. These growth rates are down from approximately 300% and 100% respectively from the prior year. While this leveling of growth is expected, we also see that customers are becoming increasingly sensitive to price and we believe the economic factors are at least partly responsible for this. However, the PND market is still one of the fastest growing categories of consumer electronics, and we continue to see strong opportunities in this segment. Garmin continues to experience strong market share in North America. According to MTB our monthly share ranges from 40% to 50%. We have also increased our market share in Europe. While the overall European market grew at 40%, our unit volume more than doubled, which resulted in improved market share. Year-over-year, we experienced a 35% decline in ASP, as the overall pricing in the market has come down and other PND providers have aggressively reduced prices ahead of plan, to clear excess inventories and exit the market. While some are predicting that pricing will stabilize if inventories are cleared and as the market further consolidates, we are anticipating further ASP declines of approximately 25% during 2008. The good news is that we have also achieved significant cost reductions, which will help support margins in this product category. Finally, despite the strong growth in the marine market during Q1, we are seeing signs of weakness during Q2 as general economic conditions, higher fuel prices and prolonged winter conditions have had an impact on consumers. As I mentioned earlier, we recently completed the acquisition of our Danish distributor, which is the fifth distributor acquisition we have completed to date. These five distributors cover approximately 75% of the European market and are helping to increase market share and serve customers better than we were able to do in the past. Additionally, we expect to complete the acquisitions of our distributors in Finland and Belgium during Q2. Our improved results in Europe, is validating our strategy and we will evaluate opportunities to further consolidate our distribution on a selected basis in order to achieve our goals. In addition to these acquisitions, we are also setting up local offices in emerging markets which have strong growth potential. On July 1st, we will open an office in Australia, which will allow us to directly serve the market. In addition we're establishing offices in India and China in order to provide better support to our in-country distributors to seize opportunities in these growing markets. Many of you are wondering about our progress on the nüvifone. I'm pleased to report that we continue to make good progress in the development and we've been privately demonstrating the device the key carriers and retailers along the way. The response to nüvifone continues to be very strong and we remain committed to launch the device in Q4. As I mentioned earlier, the feedback from our marine chartplotters continues to be very positive. In this picture, you can see a representative installation on a new boat, which include dual touch screen chartplotters, marine instruments, autopilot, sonar and radar. Customers have expressed appreciation for our touch screen displays and innovative features such as automatic routing, fuel management and our vision cartography. During Q1, we delivered a full line of marine instruments, which complement our chartplotters and expand our ability to serve customers in the marine market. In the outdoor business market, we delivered our new Edge 605, 705 cycle computers, which incorporate a color display and detailed street level mapping with automatic routing capabilities tailored to cyclists. The initial feedback from users has been very positive, and we look forward to expanding our presence in the marine market. In addition, we recently started deliveries of our Forerunner 405, 505 GPS enabled fitness watch at the Boston Marathon. We've accumulated a strong following of enthused customers, who appreciate the power of our GPS enabled fitness devices, and we are pleased with the initial feedback we've received from the markets. We also started deliveries at the new Colorado series of out door handheld devices. Colorado provides industry leading features such as a 3-inch color TFT with 3D mapping display, preloaded maps, wireless connectivity for sharing data with friends, and an innovative new UI, based on a Rock ‘n Roller keypad. In the automotive market, we announced new products which combine digital television with PND functionality. The nüvi 900 TVBH is being developed in cooperation with the Italian carrier H3G, which will reach retail shops later this summer. We also announced a version of this product which is compatible with the Japanese 1Seg Digital Television system. The 1Seg version will also reach retail shops later this summer. In addition, we announced new versions of our entry level nüvi series, which provide additional features not found in our existing nüvi 200 series. We've incorporated HotFix technology, which makes the nüvi 2x5 ready for navigation much faster than before. We also added traffic comparability, improved mapping displays, MSN Direct content and Google Panoramio photo sharing, which offers customer a unique way to identify and find interest in destinations. In addition, our entire nüvi product line is now compatible with Google and MapQuest local search, making trip planning simple and convenient using the power of the internet. While the economy and market conditions have increased uncertainty, we see many opportunities which we are prepared to grasp. We feel we are well positioned to continue growth in Europe, with our base of newly acquired distributors. We will continue to invest in R&D and product innovation, which will drive growth into the future. And finally, we will continue to invest in advertising to build awareness of our brand and products. This concludes the business update. Kevin will now walk us through details of our first quarter financial results.

Thank you, Cliff. Good morning everyone. I'd like to jump right into the results that we announced this morning on the press release, starting with the first quarter income statement. First of all the revenue that we announced, this morning came in at $664 million, net income of $148 million, and our earnings per share was $0.67 per share. That represents a 35% top line growth, 5% earnings per share growth. However, we did announce that we had $0.02 earnings per share unfavorable impact due to the foreign currency loss of $4 million during the period. Excluding foreign currency, our EPS grew at 17%. So in summary 35% top line, 17% bottom line, and I think the surprise of the quarter for us was a gross margin of 48.2% better than expected, primarily due to better material cost reductions that we had anticipated. We also experienced operating efficiencies and some favorable product mix during the period. So overall we grew our operating margin lines $35 million increase over Q1 in '07 and our operating margins as Cliff mentioned came in at 26%, down from 28.1% last year but again better than we had anticipated. The 26% gross margin primarily came from the following sources. Gross margin was 20 basis points unfavorable year-over-year, advertising was actually 30 bps favorable in Q1. The SG&A line was 160 basis points unfavorable and R&D 70 basis points unfavorable. I'm sure many of you noticed also that our units grew at 80% on a quarter-over-quarter basis, as nearly 2.8 million units were delivered during the quarter on the strength of our Auto/Mobile segment. Our average selling price came in at $238 per unit, which was an increase from the fourth quarter of '07 by about 8%. However, it was down about 25% comparing to Q1 of '07. As I mentioned with the foreign currency, we do have non-GAAP measures that we reported including net income. Excluding the effects of this foreign currency, this impact was $0.02 per share unfavorable during the period. Looking next at our segment revenue; during the quarter we experienced a 43% revenue growth within the Auto/Mobile segment, while the unit growth in that segment was 119%. We experienced a great start to 2008 with the Marine segment as revenues grew 30% compared to Q1 of '07. Our Aviation segment achieved growth in both OEM and retrofit channels with a 19% revenue increase during the quarter, and our Outdoor/Fitness segment also experienced double-digit revenue growth of 16% compared to Q1 of '07 with the fitness category leading the way in the growth category. In total our revenues grew 35% during the first quarter, which represents growth in our global PND market share. Looking next at our geographic regions; during Q1, North America revenue was up 27%, while our European business increased 43% during the period. Our Asia Pacific region sales also grew 100% during Q1 due to strong year-over-year sales in Taiwan, Australia and with our Auto business and relationship with [Kenwood]. Revenue growth in the EMEA region exceeded that of North America, primarily due to the strength of the Euro relative to the US dollar. Interestingly, we experienced triple digit unit growth from our PND products in all regions; North America, Europe and Asia Pacific. As the Auto/Mobile segments remain the highest growth business at Garmin, the Auto/Mobile now represents 68% of our total business during Q1, which was up about four points from 2007. Because of the stronger growth in Europe during the period, that geographic region now 32% of our business; North America accounted for 62% of our total revenue. When we evaluated the segmentation of the PND market, the low end unit sales of PNDs now account for approximately 80% of our unit total. The low-end revenues of our PND account for approximately 70% total, that is up from our Q4 level and significantly up from our Q1 '07 levels, where we roughly sold about 50% at the lower end. Let's look next at our margin segment. During Q1 our Aviation and Outdoor business gross margins remained stable at 64% and 53% respectively. Operating margins declined in our Aviation segment to 33% because of R&D expense in the growing business jet market. The Outdoor/Fitness operating margins declined to 27% from 35% in Q1 of '07. This was because of the discount on some of older products that needed to make way for our newer fitness and outdoor devices. Cliff mentioned this in his part of presentation. Q1 Auto/Mobile gross margin and operating margin were essentially flat with Q1 of '07 at 43% and 24% respectively. The gross margin was better than expected and higher than the fourth quarter due to favorable product mix. This was do to material cost reductions and a stronger Euro relative to the US dollar. First quarter Marine gross margin improved 58% compared to 49% during Q1 of '07. This was thanks to the heavy interest in our innovative product mix. Operating margin within this segment also improved to 32% compared to 26% during the year-ago quarter. We expect our PND price declines of approximately 25% during 2008 to be offset by projected raw material cost reduction of approximately 20% for the full year. As a result, we expect our PND margins to decline from the 43% in Q1 to the low to mid 30% range in late 2008. Looking next at our operating expenses, R&D increased $16 million quarter-over-quarter in absolute dollar terms. This was up 170 basis points to 7.5% of sales. We now employ over 1500 engineers and engineering associates worldwide. Our ad spending increased by $9 million over the year ago quarter. On a percentage of sales basis advertising was down 30 bips to 5.7% of sales. We do expect that our ad spending will increase sequentially. This is because we are in the middle of the second quarter by nearly $25 million due to the upcoming Spring TV ad campaign. Other SG&A increased 160 basis points to 9% of sales from 7.4% a year ago. We expect that our SG&A expenses will decline as a percent of sales during the remainder of 2008. Over the last two years we've doubled staffing within our overhead functions and feel that we're at a strong position to manage the business in the future. On the balance sheet, we ended the quarter with cash and marketable securities of nearly $1.2 billion. Our accounts receivables declined significantly in Q1 to $516 million and now accounts for 5.56 days of sales. Our inventory balances increased to $676 million in preparation for the spring selling season during Q2. Our days of inventory metric increased from 77 days at the end of the year 2007 to 98 days at the end of Q1, primarily in our finished goods inventory. As we prepare to give the breakdown of our inventory, we ended the quarter with $194 million in raw materials, which is about 27 days of inventory. $49 million in work about seven days, $462 million in finished goods about 64 days and we still have reserves of about $29 million booked on the balance sheet. Product availability is a top priority for Garmin and has contributed to our success. However, given a shorter product lifecycle of PND products, we are working to manage our inventory carefully. It's our goal to have adequate inventory to support customer needs. But we intend to carry the right level and mix of inventory to minimize the risk of obsolescence. While evaluating the retail channel inventory at the end of Q1, channel inventory continues to be means lean as sell-through of most of our products was quite stronger in the first quarter. Cash flow from operations during Q1 came at $192 million. We had CapEx of $27 million during the period, so therefore our free cash flow during Q1 was $166 million. Cash flow from investing was at $216 million use of cash during the period, which is made up of $27 million use on CapEx. Our net purchase of marketable securities is about $163 million, and acquisitions of businesses and intangibles of about $26 million. Cash flow from financing was $87 million use of cash during Q1 primarily due to the $90 million cash used for stock buyback that was initiated during Q1. On average, we earned about 3.0% on all cash and marketable securities balances during the first quarter. One change that I am sure you saw this morning was the change to our annual and first quarter tax rates. Our effective tax rates during Q1 actually came in at 19% higher than we anticipated. The increase in this effective tax rate from 12.6% in 2007 to 19% was primarily due to a change in Taiwan tax law related to the repatriation of earnings from our Taiwan subsidiary. Therefore, we now expect the 19% rate to continue for the remainder of fiscal 2008. As I just mentioned, Garmin repurchased shares to our stock buyback plan and that amount came in to just over 1.4 million shares using $90 million of cash during the quarter. There remains 3.5 million shares available for repurchase. Garmin intends to be an active buyer of the shares, as business and market conditions warrant. Our diluted shares outstanding declined to 219 million due to the shares repurchased during the period. And finally, I would like to spend a minute on our expected guidance for 2008. We believe that the introduction of the new products will continue to drive business growth for the remainder of 2008, similar to what occurred in the first quarter. We recognize that economic conditions will remain a factor on our future growth. While our stellar objective to reach our earlier guidance of $4.5 billion in full year revenues and $4.40 in EPS, these goals now include some risk. Without clear visibility of the economic outlook, we don't feel it is appropriate to be more specific at this time, as in prior years. We'll wait for the end of the second quarter to provide an update for our full year financial expectations. That concludes our formal remarks. At this point, we'd like to open up the conference call for any questions that you might have.

(Operator Instructions). Your first question comes from the line of Rich Valera. Rich Valera - Needham and Company: Good morning. Just with respect to the nüvi phone, Cliff, is there any more color you can put on your discussions with carriers and it sounds like you earlier talked about a Q3 launch now you are talking about a Q4 launch. Can you give us any color on what's behind that seeming quarter delay in the launch?

I think when we talked about the launch, Rich, we did indicate it would be later in the third quarter. So talking about fourth quarter we really are talking about something earlier, so that we can get on retail show. So we don't view that as being a material split per se. As far as the discussions with carriers, we're not able to discuss specifics at this time. I think people have commented that we're not showing very much of the working device at trade shows, which we understand and actually is intentional. We're doing a lot more demonstration with carriers in private, to try to keep the device a little more under wraps. Rich Valera - Needham and Company: Great. And Kevin just wanted to revisit your discussion of ASP declines and material declines. Just to clarify, your prior guidance I believe was ASP declines for the year of 20%, and now you're looking at 25%, and I thought before you were looking for 10% material declines and now you're looking at 20%.

Yeah, that's correct. I think we not only saw ASP declines in Q1 a little bit higher than we projected for the full year, which is not a surprise to us. I think the surprise is how significant the cost reductions were and that's what really helped prop up our margins during Q1. So just to reiterate, yeah we're expecting not just a 10% material cost reduction but closer to 20% for the year, with overall ASP declines on the PND market to be 25% for the full year. Rich Valera - Needham and Company: So that should actually help your PND margin trajectory, I would think, since the increase in material declines is greater than the ASP decline, is that fair?

As we go through the year, we're hopeful that that occurs, but we have to wait and see how the year develops. And we're encouraged by the fact that cost reductions were more favorable than we'd earlier anticipated. Rich Valera - Needham and Company: Great. And finally I don't know if there is any more color you can give on, I think this is in someone's prepared remarks with respect to seeing some signs of weakness in 2Q. Any more color you can give on that, where it is geographically, what product areas you're seeing that weakness in?

I think we're right in the middle of the second quarter in terms of a spring selling season where some of the major retailers are coming here in the next few weeks. I think we're still expecting growth across the business in all four of our segments. Clearly we saw over 40% growth on revenue, and like we said, triple digit growth in Q1. So we're hopeful that the unit growth will continue as we've experienced in Q1 but we really didn't comment on anything specific in Q2? Rich Valera - Needham and Company: Okay, thanks very much.

Your next question comes from the line of Ron Epstein. Ron Epstein - Merrill Lynch: Good afternoon, guys. Yeah, Kevin can you talk about the inventory just a bit more. The built up year-over-year just seems like a lot?

Well, I think what we commented in our last earnings call as we had planed on coming out of Q1 and probably Q3 with higher inventory levels to support growth in the business. So, if you look at 98 days of inventory, which is what I commented on. That's pretty consistent with what we've had as our goal. Internally it's been to have around 90 days of inventory. So I think we are pretty close to that. We don't view it as a major things; I did comment on supply chain in general. Because the product lifecycle will be very carefully of how we manage that supply chain. So, I think, in general inventories are back where we would expect it to be, with the spring selling season come up. We can hope that the sell-through will be strong and then look forward with our business. Ron Epstein - Merrill Lynch: Now, Okay and then changing gears here a little bit. Why aren’t you more active buyback the stock? I mean the stock is spent and hammered and we think this is a bigger opportunity if you guys could do more buybacks?

We did, we were pretty active right after we announced the stock buyback in late February. And since then we saw the price continue to decline. We are waiting for it to bottom, and then we get into a period where there is a blackout, so we are not allowed to buy from mid March on. So I think we'll be more aggressive right now, as we come out of the black-out period in a couple of days and be buying back likely buy the rest of those shares. Ron Epstein - Merrill Lynch: Okay. And Cliff a question for you. In the Aviation segment how active are you guys right now on new platforms?

Well we have a lot of activity going on, our teams are fully consumed with some of the turbine aircraft that we talked about before like Embraer, as well as other programs that haven't been announced yet. Ron Epstein - Merrill Lynch: Now how is it going? I mean the Phenom 300 just flew I think yesterday or the day before. I mean how is that going?

It's going very well. Embraer they were able to accomplish their flight ahead of schedule, and the Avionics have performed well during the flight as expected, so we felt very positives about the result. Ron Epstein - Merrill Lynch: Okay. And then have you guys seen any impact of the sky-high aviation fuel prices right now? Have you seen any impact in your aviation markets let's say for the handheld or the retrofit stuff? Because I think that segment in the market probably gets more impacted by fuel prices that the Turbine segment?

Yeah. I think it's a little early to tell that, but it does appear that the handheld segment is showing some weakness. That tends to be somewhat cynical as well as we introduce new products. So again the data, the variables that are applied on the data aren’t quite clear to us yet. As far as OEM and retrofit, both of those continue to be very strong in Q1. Ron Epstein - Merrill Lynch: Okay. Great. Thank you guys.

Thank you.

Your next question comes from the line of [Amer Rosolowsky].

Hello. Good morning folks thank you very much for taking the question.

Yeah.

I was wondering if you could provide a little more color on the ASP trajectory and PND. It seems as though you have a decline of 35% year-over-year in the first quarter and guiding towards the 25% for the year. I was wondering what type of new product rollouts or how we should think about that progression through the course of the year?

I think, not necessarily tied to new products, but more just the general market. I would expect and ASPs, as we enter the spring season, we're into some promotional activity, promotional programs. The one thing that helped us in Q1, is we didn't have a lot of product transition. We were moving from one product to the next. We were selling consistent products with what he had sold in 2007, with the exception of the C330, which has been at the low end. But ASPs going forward, I think we would see a decline in Q2 and another decline in Q3, but probably Q4 is where most of the pricing will occur for the rest of the year. On average, we still feel like 25% is the right number right now.

Great thanks. And then just, it seems as though from the cost perspective, you folks are benefitting from declines in cost ahead of your expectations. How should we consider the improved capacity from your own production site though with respect to potential challenges to manage that cost?

I think as we've done always in the past, as demand picks up, we ramp up our production capacity and production requirements out of Taiwan, and we do that primarily through increased service map, purchases of service map technology and then hiring labor. But, we did see some efficiencies in Q1 and we'd like to be able to believe we'll get some additional manufacturing efficiencies as we go through 2008. But I think we've proven over many-many years that we're very good at scaling up as demand picks up, and we'll like to take advantage of that in 2008.

Great thank you very much again.

Your next question comes from the line of Aaron Husock. Aaron Husock - Morgan Stanley: Thanks for taking my questions. I guess maybe just to start, Kevin, I'm a little baffled as to how your mix in PND has got worse sequentially in Q1. I mean, you analyzed for C330, when we moved out of the holiday gift giving season. And you've been thinking originally that we would see a significant improvement in the mix away from low end. What changed there?

Let me make sure we are clear. I didn't say a point that mix got worse, other than the fact that unless you are referring to the 80% units on low end? Aaron Husock - Morgan Stanley: Yeah, that's exactly.

Yeah, Okay. I think we exited the year in Q4 around the 70% at low end. But I think we are primarily left with the nüvi platform right and the C330 that we sold at the end of last year was a much lower margin. But, so I think we've benefited from the fact that we didn't sell C330 in the Q1. Aaron Husock - Morgan Stanley: Sure, I understand that. But when we talked last quarter, you thought there is a chance we would see move all the way back to 50% low end units in Q1, and that ended up at 80%. What do you think grow that variance?

It's probably also a definition of the high end and versus low end. At this time, we crossed 700 of the only high in products.

Yeah. I think as we exited 2007, we still had a mid range product, like the nüvi 3 series. That is essentially now being sold at lower price points. So part of this is how we classify low end and high end to midpoint. We are basically less with a low and high, not a low mid and a high. Aaron Husock - Morgan Stanley: Okay, okay that makes sense. And then last quarter, you had talked about seeing a recovery in PND unit volumes in Q2 on the order of 50% sequentially. Is that still something you're expecting or is that more maybe in the 30% sequential range?

We really don't want to talk about sequential, we'd rather talk about year-over-year. And I think we still expect the automobile business to continue to show solid growth year-over-year. I'll just say directionally, we're expecting because of the selling season that Q2 should be larger than Q1. But I'm not going to quantify that. Aaron Husock - Morgan Stanley: Okay. And maybe just one more for me. Can you help me understand the gross margin benefit that you got in Q1 from such a large inventory build, helping to prop up utilization despite the slow season?

We first of all can't quantify, but I don't believe it's a very material number. The larger benefit was from the cost reductions and we did benefit some from the strength in the euro-dollar as I mentioned. Aaron Husock - Morgan Stanley: Okay. Great. Thank you.

Thanks.

Your next question comes from the line of Yair Reiner. Yair Reiner - Oppenheimer & Company: Congrats on the relatively strong results given how challenging the environment was.

Thanks. Yair Reiner - Oppenheimer & Company: One more question on the gross margins. And I hate to belabor this, but could you be a little more specific on where the cost reductions came from?

Well. I think most of you'll know what our bill of material is, but they came from the areas that you'd expect like Flash memory and LCD primarily. Those are the tow largest areas of benefit. Yair Reiner - Oppenheimer & Company: And did you move during the quarter to NFC or did that already happen in the fourth quarter?

That started happening in the fourth quarter, but we continue to move towards that in our product line. Yair Reiner - Oppenheimer & Company: Okay. And now it looks like based on inventory that you have this quarter, you have a lot of the inventory you're going to sell in the second quarter kind of already new warehouses. Based on what you have there, sequentially how much do you think your cost on the same products will go down quarter-on-quarter?

Are you asking what the overall cost reduction, like we experienced 25% cost reduction in Q1, what that number will be in Q2? That's what you're asking? Yair Reiner - Oppenheimer & Company: Yeah. I guess I am asking, if you look at that the product that you sold, let's say the Nüvi 200 in the first quarter. You already have that an inventory for the second quarter. How much that Nüvi 200 going to cost you in Q2 versus Q1?

Yeah I will just say in general the trend, I'm not going to give a specific number but trends will be the range of what we've commented on, down about somewhere in the neighborhood of 20%. Yair Reiner - Oppenheimer & Company: One last question and then I'll get back in the queue. It looks like at this stage you have a bit of a cost advantage relative to your largest competitor, and your largest competitor, it looks like it's going to have a lot of new financial responsibilities come May. Are you going to use your cost advantage to try to take away more share and do you see yourself becoming more of a price leader in the second half of the year?

I think our assumptions on the ASP decline of 25% for the year take into account what we think we need to do to continue to be the market leader, and take share in Europe as we've already communicated. Yair Reiner - Oppenheimer & Company: Thank you.

Your next question comes from the line of Jeff Evanson. Jeff Evanson - Dougherty & Company LLC: Morning, thanks for taking my questions. Cliff you've laid out a lot of impressive developments in the PND category on the high end TV voice recognition at 10%. And I'm curious given your comments about the market moving lower cost certainly in the US, what's your strategy on the low-end side of PNDs?

Well I think continued cost reductions is an area of focus Jeff and feature differentiation as well to drive that segment. But we do think as we roll out some of these new products now in Q2 like the new V860 with speech recognition as well as some of the other things that we've talked about, that will help attract people back into the higher end segment. Jeff Evanson - Dougherty & Company LLC: So you are expecting a shift towards the higher end in your financial model?

Well I think a shift to the higher end is probably stronger than how I would word it. I think it will tend to support additional sales in the higher end which will support our overall ASPs. Jeff Evanson - Dougherty & Company LLC: Alright, kind of buffer it. Okay, impressive results in the marine category. Do you have any thoughts about market share there that you can discuss with us.

I think marine market is pretty hard to quantify because it's a small market to begin with and there is not a lot of market research that goes on there. We believe that we are doing a good job taking share in the mid to upper end barter range from competitors. And it seems like the low end of the market, as we mentioned earlier, we are starting to see some weakness in marine and the low end has been particularly challenging. Jeff Evanson - Dougherty & Company LLC: Okay. Thank you.

Your next question comes from the line of [Peter Fritzler].

Peter? Hello.

Hey, guy's can you hear me?

There we go. Yes.

Sorry about that.

Go ahead.

Can you give some color on the OpEx line for both SG&A and R&D, do you expect those lines to grow for the full-year '08?

Well, to our earlier guidance numbers that we gave the last conference call, we really haven't seen a significant change there. I still think the total OpEx number should be around at 16% to 17% for the full years of sales.

Okay

And that should include some operating leverage primarily in advertising and SG&A as a percentage of sales from what spent last year.

And how much flexibility do you think do you have on the SG&A line depending on how your sales are trending. So if things are trending a bit weaker how much flexibility do you have to take out that?

I'd say we have a fair amount of flexibility. If you look at our non-advertising expenses, that's where we came down from the fourth quarter to the first quarter. That shows that I think some flexibility on our expense line. And advertising, as you know, it's seasonal, so we advertise quite a bit in Q2 and Q4 and we are about ready to hit the Q2 season on advertising but we can bring that, we can scale that depending on coming season. Already I think we are going to continue to be committed to innovate new products, so we need to spend roughly about 35% growth rate per year.

Okay. Great. Thank you.

Thank you.

Your next question comes from the line of Jim Duffy. Jim Duffy - Thomas Weisel Partners: Hello everyone.

Hi, Jim. Jim Duffy - Thomas Weisel Partners: Point of clarification maybe you help to understand how you define low end versus high end? Is it a price point breaker or it is within each of the different product line themselves?

Yeah. It is probably defined as the $300 probably that (inaudible) we separate high end and low end Jim Duffy - Thomas Weisel Partners: Okay.

300 on a REIT surplus. Jim Duffy - Thomas Weisel Partners: And then would you gone to high end versus low end is there a difference in mix that you are seeing by geography? Is the shift towards lower end concentrated and uniform across both markets or…

I say the only difference would be in general. The EMEA or the European market has slightly lower prices, but as far as the mix there is not a significant difference there. And Europe has about a 10% to 15% difference in price. Jim Duffy - Thomas Weisel Partners: Okay. And then within your inventory balances on the finished good side, how are you positioned in high-end products versus low end?

I think it's pretty consistent with our sales we are about 80-20. Jim Duffy - Thomas Weisel Partners: So from a forecasting standpoint fairly you've missed the mark there.

No. Jim Duffy - Thomas Weisel Partners: Okay. And then Kevin, question on the effective tax rate what were the factors behind the rate change? Has there been a change in your business that affected the tax holiday. It's more of a tax rule and that came out of Taiwan at the end of the quarter that essentially we weren’t able to achieve some of the tax benefit that we had earlier achieved as we repatriated earnings from our Taiwan subsidiary up to the parent company. So we had to account for that in our numbers for Q1 and going forward that will likely occur in the future too. When you say likely occur in the future, that's kind of where I am going with this. What type of visibility do you have into these tax law changes and (inaudible).

On a tax law like this, we didn't have much visibility at all. We do have, I'd say, a fair amount of understanding of what the tax rate should be, given this new change. In general, I think over the next several years as we continue to enjoy the tax holidays in Taiwan, the rates should move somewhere between 15% and 20%. That's the rough range we will experience. For this year it's 19%. Jim Duffy - Thomas Weisel Partners: Okay. So we shouldn't continue with that functions upwards in that tax rate?

It's hard to know. But we don't anticipate at this point. Jim Duffy - Thomas Weisel Partners: Okay. Very good. Thank you.

Your next question comes from the line of Bennett Notman. Bennett Notman - Davenport and Company: First off, could you just talk a little bit more about, maybe one will know a little bit more about what's going on with Nüvi if there is sort of a timeframe in your mind about when plans may be unveiled?

I'm assuming Nüvifone is what you meant? Bennett Notman - Davenport and Company: Right, Nüvifone.

Yes

I would think there will be more information towards the end of Q2 into Q3. Bennett Notman - Davenport and Company: Okay. And then on the guidance to try and hit the original targets, the 440 on EPS, I assume we should adjust that down for the new tax rate as well?

Well I think the tax rate is, like I said, it needs to be adjusted for the full year. Bennett Notman - Davenport and Company: Alright. Great. Thank you.

Your next question is from the line of Scott Sutherland. Scott Sutherland - Wedbush Morgan Securities: Hey, good morning.

Hi Scott. Scott Sutherland - Wedbush Morgan Securities: Just kind of digging your guidance, and I know you are more cautiously trying to achieve your goals. You have a higher tax rate, is there something in the business, are there better margins that's offsetting. Do you still think you make that 440?

Well, like I said, I think there is risk with that number. But we will wait until the end of the second quarter to formally guide any difference in that. I think, as we mentioned, the cost reductions in general, the raw material cost reductions. How large is the market, how is the growth, there are a lot of variables. So those are the main things we are watching to see what's going to develop as we go through the year. Scott Sutherland - Wedbush Morgan Securities: What I'm trying to ask, is the tax rate increase is going to bring you guys by over $0.30 for the year. So is there something that has come up as being more favorable to at least cautiously maintain that goal? Is it just cost reductions?

I mean that's pretty much it at this point. Yeah. Scott Sutherland - Wedbush Morgan Securities: I am just trying to confirm. It sounds like your mid to high and low end. Do you expect the 80/20 mixed to be a more stable mix going forward?

Yeah, we don’t see a major shift from that level. Scott Sutherland - Wedbush Morgan Securities: The margins, you said kind of mid, ASP declines, you said 25% for the year, and you are setting at 35%. I missed when you mentioned in Q4, you mentioned it to be like more 20% or 15% year-over-year declines, so it's going to moderate as the year progresses, to get that 25% overall goal?

Yeah, what I meant is we will not see 35% ASP declines for the rest of the year, that number is going to have to come down. The declines will not be as steep in the remainder of the year, in order to get an average of 25 for the year. Scott Sutherland - Wedbush Morgan Securities: So it trends lower during the year?

Yes. Scott Sutherland - Wedbush Morgan Securities: Okay. On the outdoor fitness, you've mentioned in your prepared remarks that the margins are low again with some old products, is that largely completed?

Yeah, we believe so. We are now into the 405 the Edge series and the Colorado which are the three major new products that we've rolled out. Scott Sutherland - Wedbush Morgan Securities: Okay. And last question on Nüvifone, I think you mentioned last quarter 5% to 10% of revenue in Q4. Is that still something you think is achievable, or at risk?

I don’t think our view of the revenue contribution from nüvifone has really changed materially since our last call. Scott Sutherland - Wedbush Morgan Securities: Okay. Great. Thank you.

Okay.

Your next question comes from the line of Jeff Rath. Jeff Rath - Cannacord Adams: Most of my questions have been answered here. Kevin, just wanted to follow-up with nüvifone. You're talking about a Q4 launch here. At what point do you think you'll be able to provide a little bit more visibility to carriers and agreements? Are we going to wait until your launching, or are there some other milestones here that you might point us to maybe in Q3, anything like that might help us?

Well, I think developing carrier relationships does take time, and it's also a lot of work to go through the certification process. So in the interim, we're not really prepared to give a lot of details until we have more notable progress that we can demonstrate in that area. Jeff Rath - Cannacord Adams: Cliff, just expand on that then, what would you say is your understanding of the lead times to effectively look at a Q4 launch? Is it to go through the certification process in all of the internal back and forth with the carrier? Is that measured in months, how would you think about that?

Well, we've been talking in terms of units of weeks, but it varies by carrier and by region. Some carriers are longer than others. For example, as long as 16 or 18 weeks and some are shorter like eight weeks. So we're just trying to balance all those factors as we engage with key carrier partners and can then be able to observe our progress. Jeff Rath - Cannacord Adams: Great thank you very much.

There are no further questions. Presenters you may resume with the conference.

Okay, thank you very much. We'll be in touch next quarter. Thank you.

This concludes today's conference call. You may now disconnect.