Motorola's (NYSE: MOT) handset business had a global market share of 22% two years ago after it launched its successful RAZR, but that turned out to be a "one hit wonder". On a good day, MOT's share of worldwide handset sales is 12%.
Motorola is spinning its handset operation out to the public, but it has done so poorly; it is hard to see what the public will get. The head of the new company does what all CEOs do when they are in trouble. He fires people.
Sanjay Jha, the just-hired chief executive, will also begin to adopt Google's (NASDAQ: GOOG) Android phone operating system for many of the company's new models. According to The Wall Street Journal, "Motorola is hoping that the open-source Google platform can attract developers of sophisticated applications."
Those plans are not likely to work. For starters, the Android software system is new and so far there is no evidence it will be widely adopted. While its use may spread, betting on something so novel has tremendous risks.
The other, more vexing problem is that Motorola has not had a handset design that has been a big hit with consumers in over two years. No matter what OS the company is shipping on its phones, unattractive and feature-poor products are not going to get MOT back in the game.
Product. Product. Product. Motorola does not have one. Everything else is academic.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
10-29-2008 @ 9:36PM
PudJr said...
Motorola is so screwed....relying on an unproven OS. They think a "social networking phone" is going save them? What Fortune 500 executive clamor for it? People in their 20's all buy Apple...they dont want a Motorola.
The best part is that they agreed to pay CEO Sanjay Jha $30M even if he fails.
For more coverage on f*cked companies: http://www.f-ckedcompany.com