Motorola is currently the number 2 mobile phone manufacturer - and how that title must hurt!

Despite record quarterly sales announced yesterday of $10.9 billion, and some 52 million handsets sold in the same period, it just can't overtake Nokia.

That's not to say it isn't trying, though, as an interesting article in BusinessWeek shows.

Motorola are gunning for Nokia's lofty perch - question is, have they got the necesary ammunition? Read on to find out more.

Motorola the fastest growing mobile phone manufacturer

According to Microsoft CEO Ed Zander, Motorola is "the fastest-growing handset manufacturer on the planet," and it's latest sales figures demonstrate why. The 52 million handsets it shipped represented a 53% increase over the previous quarter. The problem for Motorola's goal of toppling Nokia, though, is that most of that success comes from the poor performance of two of the other big four manufacturers, Samsung and LG. In the same period, Samsung held 12.8% of the market, whilst LG held just 6.9% (Sony Ericsson is fifth with 5.9%). Compare this with Nokia's 34% share, which itself is up 1% from last year, meaning Nokia's market share is still growing.

Rising Motorola

Two years ago, Samsung was knocking on the door of Motorola, threatening to overtake it as number two in the mobile phone market, while Nokia was left wrong-footed with the sudden surge of clamshell phones. Since then, however, a number of things have changed.

Firstly, the Korean manufacturers have focused mainly on high-end, high-profit mobile phones with all-singing, all-dancing features. Great for consumers, great for gadget lovers, but not so great for sales, as the low-end phones are by far where the main money is, thanks to their uptake in emerging markets such as India and China. Motorola and Nokia have cleaned up in these markets, helping their market share and sales figures nicely.

Secondly, Motorola struck gold with the Motorola RAZR, selling 50 million units of that one brand of phone alone. The RAZR was so successful, it set a new trend for thin phones, which wrong-footed the Korean manufacturers whose high-tech products were naturally much thicker, as they had more features.

Finding the next RAZR

The problem for Motorola now, however, is maintaining its momentum. With the Korean threat to its number two position now receding, its goal of overtaking Nokia rests with the next generation of phones. The RAZR is already well past its prime, and Motorola's attempts at replicating its success have failed dismally.

"Clearly the single biggest thing Motorola must do is to bring [products] out that wow customers," Ron Garriques, head of Motorola's phone biz, told analysts, somewhat self-evidently. However, they've not had the success they thought they would. According to BusinessWeek:

"When the PEBL [left], a rounded flip-phone, was launched earlier this year, company execs were expecting it to take the market by storm. Instead, it's been a disappointment. The Q, a thin QWERTY-keyboard email device that hit a few weeks ago, shows more promise, but it is unlikely to have the RAZR's impact. "

Meanwhile, Nokia has been knocking everyone dead with its amazing N-Series of advanced phones that match the Korean techno-wonders, outstyle the RAZR, and offer the kind of features that reallly do make people go 'Wow!'

In addition, it has a large range of low-end phones that help keep the company expanding nicely into emerging markets.

But whereas Nokia has new phones coming with 4GB sotorage, mobile TV, 3.2 megapixel cameras with 3x optical zoom, WiFi, video and so much multimedia features the company now calls them Multimedia Computers, Motorola has...the Canary (below)! This is being pitched by Motorola as RAZR 2, but in reality, it's more RAZR 1.5. The next gen RAZR will be the Motorola SCPL, which will be thin, but that's all we know about it for now. In terms of the Wow factor, then, Nokia's winning hands down.

According to BusinessWeek:

Zander snarls at such talk as if to say, just wait. He's realistic about the company's prospects but poised for the fight. "There's still lots of share to get," he says. "We're still motivated. Still hungry."

It'll certainly be an interesting battle, and an extremely entertaining one. But I can't see Motorola toppling Nokia any time soon. Indeed, the cynic may just see Motorola's current success riding purely off the back of the RAZR, and unless it can produce a replacement with the same wow factor soon, it may just be looking over its shoulder at the Korean manufacturers again, who most certainly won't be standing still.

[Source: BusinessWeek, Nokia, Chosun, the Korea Times]

Much thanks for the tip to Alison Bradley.