updated 2/4/2009 7:49:12 PM ET 2009-02-05T00:49:12

Navigational device maker Garmin Ltd. said Wednesday it has entered into a "strategic alliance" with Taiwan-based Asustek Computer Inc. to develop and produce a co-branded line of feature-rich mobile phones.

The first device, called the Garmin-Asus nuvifone G60, will be unveiled later this month and begin being shipped by June 30, the companies said in a joint statement.

Garmin, the world's largest maker of navigational devices using satellite technology, announced more than a year ago that it was getting into the wireless device business.

The move is seen as crucial as cell phones with location-based services, such as turn-by-turn driving directions, traffic warnings or search engines for nearby restaurants and stores are cutting into the market for dedicated navigational devices.

Min Kao, chairman and chief executive officer for the Olathe, Kan.-based company, said it worked with Asus for more than a year on a contract basis to develop the nuvifone. He said the companies decided it made more sense to become partners, which Kao said would increase manufacturing capacity and reduce the time for new products to make it to market.

"This alliance is advantageous to both companies because it allows us to combine our resources and establish a strong foundation from which we will innovate and introduce the world to the benefits of (location-based services)-centric mobile phones," Kao said.

The companies didn't provide details on their alliance, other than to say they will share profits from the phone sales, split research and development costs and be responsible for distributing devices in their respective territories.

The companies have already developed the nuvifone G60, which they will unveil along with a second device at the Mobile World Congress trade show, beginning Feb. 16 in Barcelona, Spain. Additional products will be unveiled throughout the rest of 2009, the companies said.

The nuvifone G60 is a touch screen device that includes many of the features of Garmin's nuvi line of navigational devices, including driving directions, weather and traffic information and connections to social networking Internet sites.

In a conference call with analysts Wednesday, Garmin President Cliff Pemble said the co-branded devices will make the location-based features central to the device's functions, as opposed to being simply a separate program as they often are on competitors' phones.

"We believe that location is an essential ingredient that should be utilized in virtually every function that the device can perform," Pemble said.

The companies haven't announced which mobile carriers will sell the nuvifone in North America and elsewhere and haven't said how much the devices will cost.

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