difenbaker
01-23-2008, 09:12 PM
Motorola says cell phone struggle taking longer than expected
Wailin Wong
January 23, 2008 5:02 PM
Chicago Tribune
CHICAGO - With another dismally disappointing announcement from Motorola on Wednesday, new chief executive Greg Brown's legacy appears certain: He will be either the one to bring the technology giant back from the brink, or the CEO who oversaw its downfall.
Much to investors' horror, the company said it was taking longer than expected to fix the problems that have plagued its mobile phone division ever since its top-selling Razr lost favor with consumers, and will need until the end of 2008 to produce a competitive line-up. In a fast-moving business, that gives rivals like Nokia and Samsung a year to take more business from Motorola, whose market share is now half what it was in 2006 and is projected to fall further in the first quarter.
Motorola is addressing its product gaps by strengthening its software, acknowledging that today's cell phone consumers are less interested in a phone's form than its ability to handle sophisticated tasks like Web browsing and multimedia. But analysts fingered every aspect of Motorola's handset business, from product design to marketing, as behind the curve and unable to work in harmony.
Stockholders dumped shares of Motorola, which ended the day with a 19 percent decline to $10.01, the lowest level since September 2003. Trading volume was more than seven times the daily average.
''I assure you I am not satisfied with where we are, and we are moving quickly to address our top priorities,'' Brown said on a morning conference call with analysts. Brown took over as CEO from Edward Zander at the beginning of this year.
But rapid turnaround could prove elusive, given Schaumburg, Ill.-based Motorola's severely weakened position in the handset industry. With reduced scale, the company's costs go up and the resulting product line-up suffers, making it even harder to regain market share.
Charter Equity Research analyst Ed Snyder, who has tracked Motorola for 10 years, said this fatal cycle took Ericsson out of the handset game earlier this decade.
''Motorola is skirting on the edge of this problem,'' Snyder said. ''It keeps shrinking in phones and cutting that division at the same time it's asking that division to quickly churn out phones that are fantastic.''
Motorola's problems - slow response times to industry shifts, a weak product line-up and a need for better software - were already apparent several years ago, when the company's pipeline lacked strong successors to the Razr. In 2007, holiday sales of mobile phones missed expectations and the ''consistency of new product introduction is still not where it needs to be,'' Brown said.
''You need the great design, good software and services. You need the ability to get them to market,'' said Michael Gartenberg of Jupiter Research. ''It's getting carrier relationships so they want to pick up the devices. It's the right partnerships and the right marketing messages. (Motorola) has had trouble getting things in line.''
Outside of the U.S., the equipment maker is also losing ground in competitive emerging markets like China, where Jefferies & Co. analyst Bill Choi described the handset market as: ''You don't have a hit product? Market share - gone.''
Brown told the Chicago Tribune that Motorola's current woes stem partially from its poor preparation for the wireless industry's rapid embrace of third-generation technology. ''3G represents our biggest portfolio gap - one of the primary reasons we are where we are,'' he said. ''It will take time.''
more on this story here:
http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=565232561305288721
related links:
http://www.bloomberg.com/apps/news?pid=20601103&sid=ayhYFVfZCyJY&refer=news
http://www.ft.com/cms/s/0/2eccf0a0-ca20-11dc-b5dc-000077b07658.html
http://www.presstelegram.com/business/ci_8057287
http://www.smh.com.au/news/biztech/motorola-ceo-says-no-quick-fix-for-phone-woes/2008/01/24/1201025048856.html
http://www.pcworld.idg.com.au/index.php/id;1352636834
:(
Wailin Wong
January 23, 2008 5:02 PM
Chicago Tribune
CHICAGO - With another dismally disappointing announcement from Motorola on Wednesday, new chief executive Greg Brown's legacy appears certain: He will be either the one to bring the technology giant back from the brink, or the CEO who oversaw its downfall.
Much to investors' horror, the company said it was taking longer than expected to fix the problems that have plagued its mobile phone division ever since its top-selling Razr lost favor with consumers, and will need until the end of 2008 to produce a competitive line-up. In a fast-moving business, that gives rivals like Nokia and Samsung a year to take more business from Motorola, whose market share is now half what it was in 2006 and is projected to fall further in the first quarter.
Motorola is addressing its product gaps by strengthening its software, acknowledging that today's cell phone consumers are less interested in a phone's form than its ability to handle sophisticated tasks like Web browsing and multimedia. But analysts fingered every aspect of Motorola's handset business, from product design to marketing, as behind the curve and unable to work in harmony.
Stockholders dumped shares of Motorola, which ended the day with a 19 percent decline to $10.01, the lowest level since September 2003. Trading volume was more than seven times the daily average.
''I assure you I am not satisfied with where we are, and we are moving quickly to address our top priorities,'' Brown said on a morning conference call with analysts. Brown took over as CEO from Edward Zander at the beginning of this year.
But rapid turnaround could prove elusive, given Schaumburg, Ill.-based Motorola's severely weakened position in the handset industry. With reduced scale, the company's costs go up and the resulting product line-up suffers, making it even harder to regain market share.
Charter Equity Research analyst Ed Snyder, who has tracked Motorola for 10 years, said this fatal cycle took Ericsson out of the handset game earlier this decade.
''Motorola is skirting on the edge of this problem,'' Snyder said. ''It keeps shrinking in phones and cutting that division at the same time it's asking that division to quickly churn out phones that are fantastic.''
Motorola's problems - slow response times to industry shifts, a weak product line-up and a need for better software - were already apparent several years ago, when the company's pipeline lacked strong successors to the Razr. In 2007, holiday sales of mobile phones missed expectations and the ''consistency of new product introduction is still not where it needs to be,'' Brown said.
''You need the great design, good software and services. You need the ability to get them to market,'' said Michael Gartenberg of Jupiter Research. ''It's getting carrier relationships so they want to pick up the devices. It's the right partnerships and the right marketing messages. (Motorola) has had trouble getting things in line.''
Outside of the U.S., the equipment maker is also losing ground in competitive emerging markets like China, where Jefferies & Co. analyst Bill Choi described the handset market as: ''You don't have a hit product? Market share - gone.''
Brown told the Chicago Tribune that Motorola's current woes stem partially from its poor preparation for the wireless industry's rapid embrace of third-generation technology. ''3G represents our biggest portfolio gap - one of the primary reasons we are where we are,'' he said. ''It will take time.''
more on this story here:
http://www.newspress.com/Top/Article/article.jsp?Section=BUSINESS&ID=565232561305288721
related links:
http://www.bloomberg.com/apps/news?pid=20601103&sid=ayhYFVfZCyJY&refer=news
http://www.ft.com/cms/s/0/2eccf0a0-ca20-11dc-b5dc-000077b07658.html
http://www.presstelegram.com/business/ci_8057287
http://www.smh.com.au/news/biztech/motorola-ceo-says-no-quick-fix-for-phone-woes/2008/01/24/1201025048856.html
http://www.pcworld.idg.com.au/index.php/id;1352636834
:(