Motorola is exploring spinning off its mobile devices unit “to recapture global market leadership and to enhance shareholder value.”
The move comes in an ever increasingly tight market which has seen Apple capture 19.5% of the smartphone market in its first twelve months, a new iPhone style device announced by GPS provider Garmin, and a slew of Android powered phones coming later this year, including at least one mobile phone from computer maker Dell.
Motorola’s mobile phone market share has continued to slide in the face of existing competition with the handset unit recording a $1.2 billion loss in the 4th quarter of 2007.
Although mobile phones are still perhaps the public face of Motorola, the company is also an enterprise provider of communications tools to business, Government and the military.
We’re placing Motorola’s handset unit on Deadpool watch. Motorola has had a mixed track record of spinning off companies, having success with Freescale Semiconductor, however Iridium saw what was once the worlds leading commercial satellite network file for bankruptcy in 1999. A new company based around a business unit with a $1.2 billion loss is going to take some serious work in turning around under normal circumstances, but in a market that will see a slew of new competitors and where a new comer such as Apple can take such a big slice of the market in such a short time, it will be harder again, if not near on impossible.
I think you meant “iPhones’ First Casualty”!!!
Motorola has been losing market shares for a while now, even before the iPhone. It’s more of a bad company than anything. Credits should be given more to Nokia and RIM.
The iPhone captured that amount in 6 months right? It was released during the summer of 07.
Dirk,
I said 12 months in the post, but it was actually 200 days, astounding start.
I think you are talking about the US market and not global. US is not the world
Alejandro: Try convincing people who live in Silicon Valley that.
Duncan Riley: Motorola was bleeding before the iPhone was even predicted by Apple enthusiasts.
Motorola has struggled ever since it commodized the Razr. Don’t call it a bad company though. It’s largely responsible for making phones fashionable. The iPhone undoubtedly benefited from Motorola’s previous efforts. I don’t think this is the end of Motorola and mobile phones. There’s enough smart people in Mobile Devices that things can always be turned around.
Stefan
true, but the iPhone changed the markt dynamics forever going forward. The announcement is post iPhone, and as a follow on post android, post garmin, post everything. They’ve held on for this long, the iPhone and the subsequent changes to the market changed their outlook to force them to this point
Alejandro
the iPhone figures were US, but Motorola has a global presence and its been performing fairly poorly everywhere. Stefan I’d note that I live in Western Australia, probably further removed from the Valley than you are, so if that remark was directed at me, it’s lost. Motorola is shite here as well
TechCrunchers are so obsessed about the iPhone that forget to see the big picture.
Motorola lost the “regular” phones market to Nokia and Samsung. The low end is a disaster of same-looking phones (compare it to Nokia’s and Samsung’s). The middle and high end hasn’t caught the attention; the interesting PEBL was lost through a sea of RAZRs and the RAZR² failed to grab attention, while not only Nokia and Samsung, but also LG and Sony Ericsson had a sleuth of interesting phones.
On the enterprise smartphone front, Motorola had a hit with the Q CDMA, but was too late on the Q GSMs. And, on the multimedia smartphone front, Motorola launched the very good Z8 only to supercede it with the same phone with two or three changes, rechristened Z10, repeating the RAZR error.
Motorola’s problems has its own fault. But hey, iPhone on headlines attracts viewers and commenters
seems like only yesterday the razr was the hottest phone out there
Duncan,
Would you think the fact that Nokia has been increasing market share (> 40% now) has anything to do with that? Keep in mind that the smartphone market is but only a small segment of the larger pie and Motorola has been a disaster everywhere. For god’s sake – look at their emerging market strategy. It’s practically non-existent.
You should definitely look at how other companies viz. Nokia and Samsung have approached this space and how they have been able win.
-Raj
At last those stupid RAZR phones will vanish from the market…Motorola could not get over the RAZR hangover…bound to happen.
I always wondered how it is possible that Apple can just walk into a market and take it over. But Apple’s products are great and the execution is close to flawless. And other companies just flail about. I guess it take great leadership at the top to get it done.
what an incredible lack of perspective.
4 million iphones are definitely not the #1 factor in a market where over 1Bn units where shipped in 2007. motorola’s pretty much responsible for its own poor performance: everybody else seems to be doing just fine despite the iphone.
Motorola has been behind the technology curve on many occasions. In the 90s, when the mobile industry was shifting from analog to digital Motorola stubbornly concentrated on analog. Its late adoption of digital technologies like GSM almost killed the company then.
Also, Motorola is technology company that never quite learned consumer marketing. When cellular technology first crossed over Motorola was lucky because it happened to lead in the technology. However, as time passed, technologies were standardized and broadly adopted–everybody had them. To win in the market Motorola needed to build products that appealed to the consumer. It had its one-hit-wonders like the StarTac and Razr but never consistently offered a whole product line-ups that appealed to consumers generation after generation.
So, to attribute Motorola’s problems or strategy decisions to the changes brought on by the introduction of the iPhone may be shortsighted. There’s probably more to it than that.
With the Razr, they repeated the same mistakes they made with the Startrac. Sit back and let it sell. Complacency is a second only to arrogance in corroding a company, but they often go hand-in-hand. It is a fast market and if you are not actively attacking your own product someone else will.
iPhone is an overhyped p.o.s.
@Rajiv…iPhone is a p.o.s until you have one. Go and get one, if you can and use it for atleast couple of weeks. Come back and post here..
To win in the market Motorola needed to build products that appealed to the consumer.
@techmine
Rajiv is right in my opinion, i was given the I phone by a friend and while its a neat trendy toy I find that its closer to my lil brothers sidekick then my BlackBerry. Ok Its not a piece of shiz but it and the holy grail either. Its just a cute phone for hipsters. I have since re gifted my iphone to my lil brother who would rather have a Helio.
The Iphone hasnt had the impact that valley nerds think it has its not a craze but it sells well and its nowhere big enuff to cause companies to fall.
You are kidding right? This is a case of corporate suicide, not murder by iphone. Motorola did this to themselves.
Motorola is a wonderful company and is going to recover. It has a global reach. In Latin American market Motorola rules and leaves Nokia and Samsung far behind. Latin American market is enough to support Motorola until the recovery takes place. This happened with the Italian auto maker Fiat, who relied on its Brazilian factory and Latin American market, until coming to profit again. Don’t be mistaken. Motorola will recover.
give me break.. motorola will recover only when the mgmt changes.. once the mgmt recognizes that they are all there working for one company.. not for their own divisions.. mgmt just wants to get some good cash and leave…
The I phone hasn’t had the impact that valley nerds think it has its not a craze but it sells well and its nowhere big enough to cause companies to fall.