Motorola has split itself two, separating its loss-making mobile phone manufacturing division from its highly profitable broadband and mobility solutions division. Motorola really had no choice, as its weak mobile phone division was dragging the company down, despite its enterprise mobility solutions division reporting record profits of $1.2 billion in the most recent quarter, a jump of 43%.
Motorola will still be selling mobile phones. However, its focus will now obviously be on its more profitable division, leaving Nokia and Samsung free to carve up the US as the company’s mobile phones division simply cannot compete effectively.
Motorola’s decline from number one to number three
“Motorola today is in the same situation it was in yesterday,” Carmi Levy, senior VP for strategic consulting at AR Communications, told EETimes. “It lacks a viable product map and continues to lose market share to competing vendors that are consistently bringing better products to market.”
Motorola, once number one in the world for mobile phones, is now number three, with Nokia commanding a dominant 40% of the market, and Samsung recently overtaking it to secure the number two spot. Both Nokia and Samsung are forging ahead with superb new converged devices that cram in tonnes of features, as well as designer phones that make Motorla’s RAZR look like a 1970s dinsoaur.
Indeed, it was the RAZR that proved to be Motorola’s nemesis. Launched in 2004, it became the most successful mobile phone in the world, but rather than build on its success, Motorola relied on its design too much, and simply launched variants that were pale shadows of the original, and which increasingly struggled to compete with the new phones that were launched by Nokia, Samsung, Sony Ericsson and LG.
With no new exciting phones on the horizon, the future looks bleak for Motorola’s handset division.
The competition closes in
“What a celebration if you are a competitor,” said Ellen Daley, a senior analyst at Forrester Research. “I think if you are Nokia and Samsung, you put your sights on the North American market and grab as much as you can.”
And they’re not the only ones. Chinese device manufacturers HTC and UTStarcom are also eying up the US market, and are tipped to show off some of their own new mobile phones at next week’s CTIA Wireless show in Las Vegas in an effort to steal some of Motorola’s eroding market share before Nokia and Samsung take it all for themselves.
Of course, Motorola is still making mobile phones - it’s not like the company has gone out of business. However, by splitting itself in two, Motorola is making it known that if anybody wants to buy the mobile phone division, it won’t exactly be turned away at the door. Times change fast in the mobile phone world, and a new, more nimble owner may be the only way that Motorola’s phones can compete in the break-neck pace of the market.
This presumably means a plethora of new rumours will emerge through the coming months as the name of every electronics manufacturer will be pitched as a potential new owner. We’ll keep you posted on all the developments as they happen.
[Source: EETimes]
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