Friday 13 July 2007

Motorola sales decline, but still clueless

Motorola looks in danger of losing its position as the world's second-largest mobile phone maker after reporting a collapse in sales during the second quarter of the year. With the Korean manufacturer Samsung gaining ground on the American technology company, pressure is building on Motorola to develop a new hit phone to replicate the success of its wildly popular Razr handset. The company's decision to pull out of the race to sell low-end handsets in emerging markets has boosted its average selling price but hit its volumes.

Motorola sold up to 35 million handsets in the second quarter of the year, 21 per cent lower than the 45 million it sold in the previous three months and 31 per cent lower than a year ago. After missing its sales and profit targets over the period, the company said it no longer expects to make a profit from its mobile phones sales this year.
This makes me wonder, why is Motorola in such a situation? Some years back when it brought RAZR, its sales were up and they started getting recognition they have been looking for. 'But' poor interface design and very poor GUI has been always there to haunt them. Also, they do not seem to care too much of UE stability and Phones freezing and crashing have been common problems.
Combined with all of the above, there are too many political problems and their habit of looking for short term gains (laying off people so that the share prices dont go down too much) rather than long term aims is hurting their innovation.
Meanwhile, Nokia, the Finnish group that transformed itself from a forestry company and a producer of rubber boots into the world's largest handset maker, is thought to have taken substantial market share from its US rival over the past three months, with Sony Ericsson and Samsung also expected to gain ground. Amid the hype around Apple's entry into the mobile phone market with its top-end iPhone, Nokia has been forging ahead with a number of high-end handsets and a strong position in emerging markets.

The joint venture between Sweden's LM Ericsson and Japan's Sony Corp. said net profit rose 54% to 220 million euros ($303 million) from 143 million euros in the same period last year.

Sony Ericsson seems to have done well with its Walkman-branded music and camera phones, where Motorola had a bad time with the ROKR, famously produced in association with Apple. Motorola has also been the leading proponent of Linux-based phones, but there's no indication whether this helped or hindered either sales or profits.

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