Garmin's market is a lot bigger than the hand held GPS market that Android phones can supplant. In dash car systems can offer much bigger screens. Marine and air systems are a whole different animal (and can also have much bigger screens). Sports systems like their bike computers can interface with ANT+ Sport devices like wheel, cadence, HRM and power sensors that are unlikely to be supported by phones. I don't think Garmin's in all that much trouble. Yes, they will lose some of their hand held market, but I don't think that they depend on that as much as a lot of the other stuff they do, where they have less competition.
Their phone however, does seem like a non-starter. They're pretty far behind and their GPS business model in part depends upon selling their map data -- repeatedly, and it's not cheap. I don't think I'll be too interested in their phone, unless it can run the Google Maps app and it also supports ANT+ Sport and has a nice bicycle handlebar mount available and it is water proof on said bicycle mount. That might get me but that's also a bit of a niche market that I doubt will be addressed.
