It's really sad that a wireless giant like Motorola, Inc. (NYSE: MOT), who invented the radio technology used heavily in World War II and helped invent the consumer cellular business more than 20 years ago, could have fallen into such disrepair. It's so bad that it may be a hard search to find a company to buy the handset maker's faltering handset division. LG Electronics' spokesperson Joh Joong Kwon even said "We are not interested in buying Motorola's handset business ... we believe it is better for us to focus on our resources to grow on our own."Remember, this is the part of Motorola responsible for trend-setting hits like the StarTac and the RAZR. It's hard to imagine how a seasoned leader like former CEO Ed Zander (mis)managed to completely fail in his attempt to keep the cellphone giant at the top of its game. After quarters of huge losses and a product portfolio that spent all of 2007 losing market share, Motorola's just not near what it used to be. And, buyers are not coming out of the woodwork looking to buy its cellphone business.
It's not that Motorola is a has-been: it still commands third place globally in wireless handset market share, which is nothing to sneeze at. But Asian cellphone makers like LG Electronics, Samsung Electronics and even joint partnership Sony Ericsson are not exactly lining up to look, based on what is being reported. All of them remember the disastrous results when, years ago, Taiwanese handset maker BenQ bought Germany's ailing Siemens handset division -- what a huge flop that was. BenQ Siemens eventually filed for bankruptcy due to the decision. Even though this deal would be different, the similarities are too hard to ignore -- which means Motorola may just have to break up the company and go at it as separate entities without any buyers for those divisions.
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Reader Comments (Page 1 of 1)
2-08-2008 @ 2:49PM
Joseph Luk said...
The biggest problem Motorola has is its cellular product line. They simply make too many different phones. Each phone style they make comes in different frequencies for different carriers, and have different colors and software. They tried to make every carrier happy rather than make things more profitable for themselves. RIMM makes essentially 3 models, with many common parts between carrier specific models. Nokia makes phones only for GSM, and doesn't offer many carrier specific phones. Motorola however, makes phones for practically every carrier and every frequency in the U.S.. Their latest phone, the RAZR2 was released across every major U.S. carrier, a total of 4 different models, each with very different specifications. Take a trip to Hong Kong, where you can find cell phones from practically every market, Motorola has a deluge of RAZR models. The last time I went in December, there were at least 20 different RAZR models to be had. And these phones didn't share that many common parts, the screen sizes were different, camera megapixels, and casing. To me it feels like Chrysler, who used to make 3 versions of every car they sold, Plymouth, Chrysler and Dodge. The problem is that it is really difficult to keep such complex operations profitable due to inventory concerns. This is made even more difficult when you aren't selling phones at premium prices. Motorola needs to pare down its product line, and refocus its resources on quality and not diversity.
2-12-2008 @ 6:54PM
Been there said...
The biggest problem Motorola hasn't its cellular product line with different phones style and different frequencies It fall into it; development and engineering They simply cannot develop a new phone ON TIME and HAVE IT WORK OUT OF THE BOX. Motorola top management lost their quest for quality, and only looking on how to made it cheap and fast. They should remember the focus that was placed on NTT!