Motorola promises innovative new phones next month
In a bid to turn around their ailing fortunes, Motorola execs have promised some "innovative" new phones that will be announced next month. Motorola, once the world's number one mobile phone manufacturer, have now slipped to number behind Nokia and Samsung, with their market share sliding from 21.9 per cent a year ago to just 14.6 today.
Most of this can be attributed to the company's reliance on just one product - the Motorola RAZR, which, despite being a phenomenally good-selling phone in its day, is now well past its prime, and its sales have slid drastically this past year as new models from its rivals have overtaken it both in terms of styling and features.
The Motorola RAZR almost single-handedly created the designer phone market. So good did it look compared with its competitors back in 2004 that it sold by the bucket-load, and enabled Motorola to capture the entire designer phone market all to itself. Had Motorola continued innovating in the field, it surely wouldn't be in the mess it is today.
Unfortunately, it chose a different path, and flooded emerging market with cheap low-spec phones in an effort to gain market share at the expense of profit, while relying solely on the RAZR and a few other weak designs such as the KRZR, PEBL and SLVR to hold off the competition.
This clearly was insanity, particularly in the fast moving mobile phone market. At a time when the other four manufacturers are releasing high quality 5 megapixel camera phones, Motorola's phones can only boast a lowly 2 megapixels with no autofocus.
Equally other innovations, such as Sat-Nav phones, high quality video recording and music phones, or even super-thin designer phones, have all been largely ignored by Motorola, whose phones are now at least two years behind the top-end Nokias and Samsungs.
Luckily new handset boss Stu Reed recognised this folly, and has promised that innovative new phones really are on their way. He claims that Motorola isn't looking for a single super-hit again, but will be releasing a a wide portfolio of innovative models.
"We will not ride one horse to the bitter end again," he said.
Frankly, it can't afford to. It's disastrous strategy hasn't just cost it the number two slot - the company reported that its mobile handset division won't make a profit until 2008 after over a year of losses, and that 7,500 jobs will go in an effort to save $1 billion in costs.
Of course, the strategy could have worked, as canny LG have shown. Recognizing the huge potential of the designer phone market, they released the LG Chocolate and LG Shine range, both of which have been huge successes. Indeed, it's the success of these phones, combined with Samsung Ultra range of super-thin phones, and most of Sony Ericsson's phones, which has seen the decline of the RAZR, as the new designer phones look better, newer, and offer better features
But the tide of fashion is changing, and LG have recognized this before Motorola did. LG didn't just rely on the one make of phone in the first place, and have recently announced that they're shifting focus away from designer phones to more feature-rich phones. Rather than simply saying "innovative new phones are on the way", though, they've actually released one - the LG Viewty, which will offer a 5.2 megapixel camera with autofocus, and a stunning 120fps video recorder.
For Motorola to have any chance of regaining its number 2 slot (let alone the number 1 slot), this is the type of phone it needs to pull out of the hat next month. After three years of stagnating, I doubt it can do it so soon, but it needs to be releasing some seriously innovative new phones soon if it wants to return to profitability.
[source: CBC News]
