Motorola contemplating exit strategy from mobile phone market
Wednesday, January 30, 2008 7:50
The world without Razrs and Krzrs sounds like a dark and deprived place. This is exactly what we may be looking at. Motorola has consistently lost market share to Samsung, Nokia and Sony. After suffering a dramatic drop in mobile phone sales during the fourth quarter last year when compared with the same period in 2006, the company may exit the handset market.
Motorola has seen its market share go from 23% to 13% in 2007. If the company should actually exit the market, it’s not clear how quickly it would phase out its handsets. However, other offerings such as add-ons like Bluetooth headsets and speakerphones may not be affected.
Electronista says the company is one of the few handset makers that is actually losing market share. There are a few possible reasons for this. Stagnation, the company did enjoy success with the Razr and Krzr line but those have remained largely unchanged offering few new features that Samsung, Sony and Nokia currently offer in even the most basic of handsets. Other offerings are below average. Call quality, something that Motorola phones used to be known for hasn’t kept up with the competition either. Though, that depends more on which market you are in and which carrier is your provider. It still has little bit to do with the phone’s hardware and the company just hasn’t kept up.
One area that Motorola does see success in is the smartphone market. Smartphones are just a tiny fraction of handset sales but HTC has been losing market share to Motorola in this area. The Smartphone market is growing but not at a great rate and most of the growth is thanks to Windows Mobile. But, that mobile operating system is loved just about as much as Vista is.
It’s also possible that Motorola could stop production on traditional handsets and decide to grow its Smartphone line. Oh, that’s what we have Blackberry for, never mind.
Motorola might be able to change things for the better if it would start to innovate a little bit but it may even be too late for that. Only time will tell.
