Friday, May 09, 2008

The Fall of Motorola (Handheld Division)

Not so long ago, Motorola had the most stylish clamshell cellphone in the market. They were the first to release a phone that was thin, a strong anodized aluminum shell with an electroluminescent chemically etched keypad.

This chart from Yahoo! Finance displays Motorola’s stock situation during the last six months.

Besides, the fall in stock, there has been a lot of talk about Motorola shutting down the handheld division.

Motorola went down hill after the success with the RAZR. Instead of focusing on a solid software platform for the RAZR, Motorola continued shipping the crippled RAZR 2 with a half baked version of Linux. There wasn’t an active developer base developing apps. The User Interface (UI) was slow and prone to crashes.

RAZR 2 ought to have had a version of Windows Mobile thrown in, increased onboard memory to 2Gigs and a camera that beats Nokia.

To make matters worse, RAZR 2 was expensive. Expectations from cellphones began running high between 2006 and 2007. The price point for RAZR 2 that did not do much for a phone released in 2006/07, added to the failure. Sony Ericsson and Nokia were pushing out faster and better phones three times faster than Motorola.

The next problem is that Motorola probably lost out on market research and the need for foresight. The least you could do is figure out why the RAZR was a success and build on that.

I think Motorola ought to have been aggressive on a quarterly basis. Release new updates at a high speed. Why wait to release an update two years later only to realize that this one is the same as the previous release. It is ridiculous to wait. You will have probably lost millions in revenue waiting or the competition will have eaten you. And then it is too late to rise again.

Sony Ericsson for sure figured they need to be heading in a different direction. The XPERIA X1 with Windows Mobile 6 under the hood proves this. Windows Mobile is a first for Sony, opens up a lot of doors for businesses, applications and developers.

There are ways to monetize through software on cellphones for business use. Applications, push email, secure communication protocols, custom applications, hardware accessories, custom developer toolkits, email, web proxy services.

The shift from Symbian to Windows Mobile is a surprise from Sony. I guess this is where the company changed gears, something that Motorola ought to have done two/three years ago!


Yahoo! Finance Stocks
USA Today - Motorola mulls breakup, phone unit sale
Motorola Exploring Sale of Handset Business

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