Summary
Cost cuts will only take Motorola so far. Eventually, the company needs to address handset market demand or fold.
Analysis
It's all about listening to your customers. Years ago, Motorola lost the leadership position in wireless handsets by not listening to carriers and consumers, believing they knew better. They produced handsets no one wanted -- and they are still doing it!. Meanwhile, Nokia quickly assumed the leader's spot by listening to carriers and building handsets that met the requirements while Motorola resisted. Nokia sent droves of engineers with note-pads in hand to interview RF engineers, product developers, and marketeers within leading carrier organizations here in the US. They conducted consumer focus groups. They listened, delivered, and won the leadership spot.
Motorola is fully capable of producing world-class wireless devices. They must become a market-driven organization. No one has bought a $2000 wireless handset in nearly 20 years yet, Motorola launched Aura last year. This year, the follow-on Celestial edition came along (again, $2000). The way out of the hole is to address carrier and consumer demand for a better iPhone. AT&T aside, every US carrier is looking for that magic bullet: an iPhone or iPhone killer. Asian handset manufacturers are trying to deliver. One has the stated mission of becoming the leader in handsets by 2010 and their plan is to deliver a broad line-up of smartphones, addressing both low and high-ends.
Personally, I'm a Motorola cheer-leader. I've been a Q user for a few years now and love it. I'm waiting for a new version and hope the wait isn't too much longer.
Lynne Gregg consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
