From the bestselling cellphone in history to the most ignominious departure of a CEO not related to any criminal behavior, Motorola's had a hell of a slide, but still, the latest speculation comes as a punch to the chin. Richard Windsor, an analyst with a firm called Nomura International, says that Moto may exit the handset business. On one hand, it could sell the division to Chinese investors, but on the other hand, not even the Chinese really know how to solve Moto's problems. What happened, Motorola? Seriously, what in hell happened? [MarketWatch]
Moto Knocked Out of Handset Business?
8:34 AM on Tue Jan 29 2008
By Wilson Rothman
8,980 views
53 comments








Comments
Goodbye, Moto...
trying... to figure out... how to work.... hello moto into an insult..... oh i give up.
I did business with Motorola a couple years ago. It was a complete joke. Everybody was just trying to guard their jobs. Their teams could barely use Outlook. I'm not surprised at all about their issues.
too many uninspired products?
Sure the RAZR was cutting edge when it first came out, but it became bland when competitors also did the same thing, and Moto too kept doing the same thing.
Nokia is what happened. Nokia marketshare has grown globally at the same pace as Motorolas share has dropped. The key to this has been that high volumes guarantee low component costs for Nokia, which means they can sell budget phones at prices Motorola can't compete with. There goes the low-end users.
At the same time Motorola failed to follow up on the highly successful Razr, which meant tons of Motorola owners migrated to other brands after they were done with the Razr. There goes the mid-range users.
Apple's iPhone has also raised public awareness to more advanced functionality in a mobile device, and while Nokia has had S60-based devices (think N95) that can answer on a feature-to-feature comparison to the iPhone (though not in UI sexyness), Motorola does not have anything even close. There goes the high-end users.
What many haven't realized is that Nokia just put another nail in Motorola's coffin by buying Trolltech yesterday. Trolltech makes Qt, which was central in Motorolas Linux-centric software strategy ("MOTOMAGX") in the Qt/E version (now known as Qtopia).
Software. That's what happened. I have owned a lot of motos, and everyone of them had buggy, slow, and barely functional UI.
@zenpoet: I agree 100% with you. Their designs have always been there, but the software is what ruins everything. (At least on verizon's side, I dont know about the other carriers.)
The KRZR is what ruined everything. WORST_PHONE_EVARRR
Nokia's UI might be faster that Moto's, but it makes absolutely no sense to me. For those of you that want to say something otherwise, you obviously haven't tried the 9300. And don't blame Verizon's UI on Motorola.
I have to agree with KIM98. The lost both ends of the market and have not delivered a decent product since the Razr. Did I ooo and ahhh and the Krzr...uhh no and neither did anyone else really.
The software issue is entirely Verizon's fault. They load their proprietary software ontop of Motorola's. This CRIPPLES the motorola software and makes the phones very unstable.
From Motorola the phones are very capable and have excellent software.
This has probably significantly contributed to Motorola's downfall. Their phones are decent phones. No worse than anybody elses and they usually look much better.
Moto will be fine. Handset Market is like the TV business, low margins, highly competitive. Look at APPLE, they revolutionized the phone with iphone, and stoick is down 35% since reporting earnings of its first full quarter on sale.
Moto has a very lucrative Public Safety Communications Business. Police/Fire/First Responders with big margins. They own 85% market share of that business. They will be fine. Trim the fat, use that money to focus on what you do well.
Only people on sites like this care that theyre phone can do more than "just make a call".
Moto's problem is software, not Hardware. I know a company that has 18 billion sitting in cash reserves, with a stock price that has suffered 35%+ loss over the last few weeks with nothing innovative on the horizon. They do software pretty well, wonder if they would be interested in Motorola's Cell Business.
What's frustrating is that all the pieces of a good handset maker are there, but they just can't seem to put it together. Rehire your design team, use your supply chain to reduce costs, release lower end (albeit, lower margin) phones to create brand loyalty, make your Q a bit narrower (it has all the features, just a bit too big), market your other phones (PEBL was a cool phone, you should have pushed it harder), and speed up your UI.
The costs of all of this are probably the same as the parachutes you're paying those complacent as*hats who put you in this spot.
@zenpoet:
YES. An ancient Samsung circa 2000 that I keep in a shoebox has a faster, more intuitive UI than the POS L7 that I use currently. Seriously Moto, get your shit together.
Watch RIM further explode as more apps become available, and watch what happens as Android gains some traction. Nokia should take a lesson from Motorola and the doom apple almost faced before people figured out how to open their phones.
Stupid CEOs that have no clue how to run a tech company. These idiots should study the hell out of Steve Jobs to learn a thing or two.
Worst. UI. Ever.
@Kim98:
The Razr was crteated by folk in 'non' Motorola mode - it was very nearly quashed.
But they fail to follow up because the talentless MBAs that rode on the coat tails of the Razr weren't the talented ones that might make a true successor.
I hope someone in their corporate realm reads this comment.
Power to the creative talent - not the MBA superstructure - its in your own interest.
@TIVOUPGRADE: you obviously are not taking notice of what is happening OUTSIDE the U.S. Rim in nonexistent outside CANADA and the U.S and the iPhone outside the U.S compared to how much they sell in the U.S especially in the consumer.
Every mobile phone market is different and I think that's the reason the iPhone is not selling particularly well and Rim only does well in business. You cannot apply the same strategy in every market like apple is trying to do. Whets perfect for the one is not the same for the other.
Nokia sold 133M mobile phones in 3 months because it adapts to every market
Personally I think Motorola's downfall was horrible menu system and the same design over and over again
@permissionmag:
i absolutely agree - they have the MOST unintuitive ui ive ever encountered
i have to admit - some of their designs have definitely appealed to me - but i could never use a phone with such a horrid ui - heres hoping that whoever takes over realizes that, after 10 years, a ui upgrade is probably in order (although, it did take them about that long to realize that they had the send and end keys on the wrong sides of their keypads)...
Oh well, bye Moto.
Sell it to Lenovo bayotch.
Lack of a focus and defined direction have lead to Moto's downfall! They came out with a revolutionary product and never capitalized by continuing to invest and improve their products.
Looks like upper management and the execs took their money and ran.
Sounds like every other large corporation.
@wireman121: WesternWireless/CellOne/Alltel has been slightly better than the Verizon software, but just barely. I would call it a slightly polished pile of buffalo crap.
The problem I see is the CEOs tried to milk money from Moto at good times and never expand R&D when RAZR was successful. Instead, they give employees like $10K of bonus in year end for 2 years. The CEO opt for handing out big bonus to employees because he in turn will get a even bigger bonus. As a result, Razr can't be milked more than 2 years and there aren't any successor that is up to par with the market.
Easy peasy: lousy user interface. I wouldn't have another given.
Not in tune with the times...
Beautiful phones on the outside, little to shine on the inside.
I don't need a phone with MP3 & video player as the main staple.
Honestly, iPhone fans out there.... How many times a day do you guys or gals use the PMP functions of an iPhone?
If you are a student in college, often I guess. If you are part of the workforce with a PC in front of you most of the time... my guess rarely.
Most people I know that have iphones do use the phone book / internet conectivity (e-mail-web) on a regular basis. Which is what the phone was designed for. Otherwise, an iPod would fill the PMP role.
Moto tries to compete in the do it all phone with mixed results.
If Moto should concentrate in doing a good smartphone or WinMobile phone that is not a brick in size, allows for a good web experience and "some" PMP funtions then it could regain market, otherwise:
Moto lost it's mojo.
i still love my rokr e2 though
Why doesn't Moto just bite the ear off of Nokia and call it a day?
Same thing that happened to palm. They got complacent with their product, made very few innovated upgrades to the OS and then companies like RIM, M$ and Apple came around and smoked em.
The Motorola V60 has the same OS functionality at the RAZR except it's in color.
@jos:
The Razr 2 uses Linux, which is a *completely* different from the RTOS that was used in V60 and other older models. I believe you are talking about the user interface not the OS. The two have nothing to do with eachother, as is evident for example from the fact that the UI in an iPhone looks nothing like the UI on a Mac computer, or from the fact that the UI in a Razr 2 looks nothing like the UI in, say, Linux with KDE or Gnome as the UI.
Motorola needs to stop making every damn phone look like a razor, all there damn phones now look the same since the razor came out look at the krzr and others they took the damn razor design; and shrink it, made it a slide phone, made it a little bigger, wider, thinner.
Come up with something new quit using the design of the razor and a new os would help quit making little changes to the ui everybody knows its the same thing.
Sexy design can't save them. Their phones have poor reception compared to cheaper Nokias and, as has been stated, their UI (not Verizon's, but Moto's) is trash.
@Darrone:
The new definition of corporate downfall:
"Hell-O-Moto"
See, easy (not to mention lame)!
Noooo! I want my Moto Ming2! Or at least, I planned to want it if it was as good on the inside as on the outside... which is probably won't be. *sigh*
@UK.Baby: The iPhone's not selling well? Really? Name one smart phone that sold more units over the same period.
@Brian B:
Nokia sold over 60 million smartphones during 2007. Since they have about 20 smartphone models currently on sale, that means 3 million per device on average. The iPhone has sold 4 million so far. Nokia doesn't usually release exact figures on a per-device basis, but the CEO of Nokia (Kallasvuo) told already at the Q3/2007 investor's day that they had sold 4 million units up of that model up to that point. The N95 started sales at the end of March 2007.
In case that was too complex for someone, the N95 had sold 4 million in six months (Q2 + Q3). That's the exact same pace as the iPhone, which sold 4 million in the six months of Q3 and Q4 that it's been on sale.
Samsung pounded the bejesus out of the cellphone market by flooding tons of different models trying to satisfy as many everyday / nonbusiness handset users as possible. Nokia, then came along with their Smartphones truced the rest the business market. So, Motorola who loved their multiple versions of the SAME phone, just didn't poise themselves to take back their market share. Did we REALLY need to see another Razr phone?
Sorry for spamming but I made a critical typing error there. I meant to say that Kallasvuo told investors at the Q3/2007 investor's day that Nokia had sold 4 million units *OF THE N95* model between it's release at the start of Q2 to the end of Q3. That's 4 million units sold of a single device model in six months.
We also know that Nokia sold more than 1 million N95's in the UK during 2007. The iPhone is currently on a slower pace there and is not reaching the sales goals set for it. As UK.Baby said, the sales are not that great for the iPhone outside of the USA.
In any case, as is obvious from the fact that they sold 60 million smartphones total during 2007, with about 20 different models, even on AVERAGE they sold 3 million per model. That means the iPhone is selling slightly better than the AVERAGE Nokia smart phone. Is that "great sales"? Hmm.. Really?
You see... I thought Motorola was coming back from the Dead ever since it released the ROKR E8 which was well received at CES. Didn't it win one of the best-of-show awards.
I posted about Moto back from the dead just after CES.
Nokia didn't kill Motorola. Nokia has always had a dominant marketshare; if anything, the rise of Samsung has knocked Motorola back, but that's not the problem.
Nor is Motorola's absolutely ABYSMAL UI the main reason for recent woes. Motorola has always had an awful UI, but that didn't stop people buying the RAZR in droves, did it?
The real problem is Motorola didn't really understand the success of the RAZR.
There was a fantastic piece in Fortune magazine talking about the creation of the RAZR, and the out-of-the-box thinking that led to the final product -- the unconventional name, the (then) revolutionary materials used, even making the phone wider than focus groups said it should be to make it as thin as possible. In the end they made a phone that was expensive enough for rich fashionistas -- but sexy enough for everyone to want. And don't underestimate the name. Catchy. Distinctive. Evocative. And a hell of a lot easier to remember than (say) "Nokia 6303".
What Motorola SHOULD have done was then go on and take a few more chances, make more different and distinctive phones, and build a strong brand around them -- they did with RAZR. Instead, they cloned the RAZR and stuffed the RAZR's style into every type of phone they made. They cloned the phone instead of cloning the strategy.
So with so many Motorola phones sporting RAZR-like looks, and with the original RAZR falling in price far enough for it to be a mass-market phone, after a while everyone had a RAZR or RAZR-like. And if everyone has a RAZR, well, the early adopters that drove early demand for the product need a newer, cooler phone. And Motorola had no answer for them. Samsung did. LG did. Nokia did. Motorola didn't.
Never had a problem with Moto's UI. My first 3-4 phones were Moto's and we got along just fine. Better than Samsung and LG's UI in my own opinion.
I just don't see how a long time cellphone manufacturer can go from having some of the best phones ever, and exclusive deal with a carrier [NEXTel], and the must have phone of the decade (sans iPhone, perhaps), and then just disappear.
I'd rather not see them go (because competition will go down), but if they do leave, they DESERVE to for sucking so long, when they had all the money in the world.
They hit a total home run with their style over substance, overpriced RAZR, with a crappy operating system, anemic features & poor Quality control.
They had years to upgrade the OS a little, develop something nicer for it, with all their extra cash, and they did NOTHING. The last generation RAZR is moderately better than the first generation, but they did the bare minimum. I have no idea what they were doing with the profits.
Screw them (I was stuck with a RAZR that was given to me as an insurance replacemnt, and the OS was just garbage).
America First!
The forever sandwich...
[www.newscientist.com]
I still dearly miss and love my E815. The V710/E815 was a solid phone with great features. And then...the RAZR ruined everything. I have a VX8700 now, and I just don't have that great human/technology bond I had with my E815. Not to mention my first one's camera died for no reason, and my second one's software is already tripping up (glitching, etc) and I've only had it for about 4 months. Took my E815 two years to start glitching like that, mind you, after about 5 accountable drops.
@Kim98: Some RAZR2's have Linux, some do not. I believe the RAZR2 V8 is the one with Linux. Doesn't matter too much anyway...
I wont miss you. Now every cellphone will have the same "green and red" buttons in the right place.
You folks can knock Moto all you want; chances are you never tried their Linux platform.
It's awesome. Problem is, they didn't release it in the US till the RAZR2 came out.
@wireman121: verizon changes the menus on ALL of their non-smartphone phones. not just motos.
and i think moto's demise is due to late adoption of linux (as already said) when their old OS sucked, and on top of that, spending so much time trying to milk every last penny out of the RAZR family and franchise that they didn't realize how sucky the RAZR and its half-brained fashion-centric brethren are. my friend has the ming...great phone, absolutely beautiful, but never officially released in the US, moto should have made an america-ready ming instead of making.