It is thought the Garmin-Asus brand will offer smartphones with operating systems from many providers, including Microsoft Windows Mobile, Linux and Google's Android, said Jonney Shih, chairman of Asustek.
Garmin-Asus will compete against popular devices such as the iPhone and T-Mobile's G1 Android-based handset by specialising in location-based services (LBS), executives from both companies said.
The companies plan to deliver their first co-branded product in the first half of 2009, the Garmin-Asus Nuvifone G60, which will be a refresh of the original Nuvifone G60 that Garmin commissioned Asustek to build last year.
A new Garmin-Asus mobile handset will be announced at the Mobile World Congress, which takes place in Barcelona later this month. It is likely to launch globally in 2010, said Shih.
"We worked with Asustek on an ODM (original design manufacturing) basis for the Garmin Nuvifone G60 and that made us comfortable enough to look into a venture such as [Garmin-Asus]," said Min Kao, chairman of Garmin.
Asustek has been making mobile phones since 2001 and has launched several smartphones, mainly with Linux or Microsoft Windows OSes.
The company's entire mobile phone efforts, including research and design teams, will now exclusively create products and work under the Garmin-Asus name, said Shih. Asustek will phase out its own-brand mobile phones.
When asked how the companies plan to compete against an impressive array of smartphone rivals, they said a focus on location-based services will be different than music phones, search, email and other specialties of their rivals.
"This is an LBS-focused smartphone venture, that's different than anything out now," said Kao.
Location-based services from Garmin-Asus will include maps that display a variety of information including friends' houses along with destinations. Information delivered to users will include details relevant to their location and destination, such as traffic conditions, movie times and more.
Garmin has worked on location-based devices for years, including for boats, airplanes, cars and outdoors products.
The companies also eschewed suggestions that launching a new brand amid an economic downturn may be a bad idea.
"During tough times we need even more differentiated products, even more exciting products," said Shih.