Noah Zatzkin: And then maybe just one in terms of — I know you’re guiding to the pro forma tax rate of 15.5%, but any update on kind of when the tax rate officially changes?
Douglas Boessen: Yes. So yes, we are guiding to a 15.5% for the full-year. So it’s really related to the increase in the combined Switzerland tax rates and the impact calculation of a global minimum taxes. So in December of ’23, here recently begin a Shop House and actually pass some legislation, which effectively combined or increased the combined Switzerland tax rates to 15%. So that basically affect beginning of the year, 2024.
Noah Zatzkin: Thank you.
Operator: Our next question comes from Ben Bollin from Cleveland Research. Please go ahead. Your line is open.
Benjamin Bollin: Good morning everyone. Thanks for taking the question. Cliff, I’m curious how you think about the contribution of new activations versus refresh across both outdoor and fitness. And then I had a follow-up.
Clifton Pemble: Yes. So new customers to Garmin are still the majority of our registrations that we have on our platforms.
Benjamin Bollin: Is there any differences that you’ve noticed between outdoor and fitness? Does one seem to be more of a refresh versus the other or it’s pretty linear across segments?
Clifton Pemble: No. I mean it does vary by segment and more specifically it varies by product line. Some of our product lines due tend to be driven by existing customers, while others tend to be driven actually by new customers.
Benjamin Bollin: Okay. The last one for me is curious what you’re seeing in China and India. Just bigger picture, what’s your strategic initiatives there? What are you trying to do? What type of performance have you seen? And that’s it for me. Thanks.
Clifton Pemble: Yes, I think in China, the economic situation has been more challenging. I think our performance has been okay. Some countries in Asia do better than others, but in general, I would say it’s doing fine given the situation there. We do have a mix of retail partners and our own retail shops in various parts of Asia, including China. So we tend to go a little more direct to customer in some of those countries. In India, we’ve kind of reset our approach there, and we’ve got a new distribution partner that’s working the market, and we expect to see improvements there. But in general, India is kind of a small market for us right now.
Benjamin Bollin: Thanks.
Operator: Our last question will come from Ivan Feinseth from Tigress Financial Partners. Please go ahead. Your line is open.
Ivan Feinseth: Good morning. Congratulations on the great quarter and year. And thanks for taking my questions. I have a couple of questions. You mentioned gaining market share in smart wearables. There was recently another notable large smart wearable company that had an issue with their pulse ox readings and eventually dropped right now from their product offering. Do you feel — or did you see that as a major driver of consumer choice to the Garmin watches?
Clifton Pemble: Yes, I don’t know that, that was a specific major driver, Ivan. But certainly, we do offer that feature, and we have a feature that’s very different from any other player that’s out there. But in general, I would say that our products are doing well because they’re strong on a broad basis across all kinds of features and the ability to monitor both health and wellness functions as well as strong activity performance as well.
Ivan Feinseth: And then you started to roll out significant upgrades to your Connect app. And what are you still your thoughts on maybe tiering that as far as a premium subscription level?
Clifton Pemble: Well, we continue to look at options for how do we monetize our app base. That’s not something that we’re eager to plow into because we recognize that a lot of people use our platforms and trust Garmin, especially with the security and the privacy of their data. But there are premium features that we will look at that could possibly result in premium tiers for some of our apps much like we’ve done for example, in golfing.
Ivan Feinseth: And then two questions on the automotive OEM side. You mentioned that the new customer you’re onboarding will not require much R&D. Is that because you’re going to get a lot of mileage going forward from the R&D that you’ve invested so far and that each incremental customer will be more and more profitable?
Clifton Pemble: There’s certainly some leveraging of the technologies that we’ve developed in order to be able to support this kind of customer. But this is actually a build-to-print opportunity. So the design work has been done, and so we’re leveraging our factory and our process engineering to bring it into our Garmin factories.
Ivan Feinseth: And then my last question, you mentioned the strong product momentum going into ’24. Can you give us some idea of what areas and new products we could expect to see?
Clifton Pemble: Well, we don’t mention any of our upcoming releases that aren’t already public. But just yesterday, actually, we did announce the Forerunner 165 which I’m super excited about. It’s a really strong entry-level watch with a bright OLED display. And I think I have a lot of personal expectations that it will be a popular product.
Ivan Feinseth: All right. Thank you. Congratulations and wishing you a big ’24.
Clifton Pemble: Thank you.
Operator: We have no further questions. I would like to turn the call back over to Teri Seck for closing remarks.
Teri Seck: Thank you all for joining us this morning. Doug and I are available for callbacks and we hope you have a great day. Bye.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
