The name "Motorola" has been synonymous with innovation for quite some time now. Motorola Solutions Inc., formerly known as Motorola Inc., founded in 1928, is headquartered in Schaumburg, Illinois, and provides products and services to educational segment, government, retail, health care, hospitality, manufacturing, mobile operators, wholesale business industries, etc. This global Fortune 100 company has a varied product portfolio which includes bar code scanners, cellular networks, computer aided dispatch, emergency call tracking services, etc. The company's primary offices in the U.S are located in Libertyville, Horsham, Lowell, Plantation, San Diego and Sunnyvale. With a strong presence in the US market, it posted revenues to the tune of $22,063 million in 2010. $3.22 billion, or, 28% of this total revenue came from the US based Verizon Communications.
Motorola has a strong presence in the wholesale and retail market. Apart from supplying products and services to businesses, and individual customers, Motorola also serves the US government. Having the US government as a customer may be a feather in Motorola's cap, but it comes with its own risk. Though some of the contracts that Motorola has with the US government are long term contracts, they can be cancelled anytime, at the convenience of the government. This may adversely affect the company's earnings over several quarters. Also, the performance and compliance costs of Motorola may be high, owing to compliance with the various regulations by the US government. Failure to comply with these regulations may mean disbarment or suspension from the US government contracting or subcontracting. However, the company estimates that these costs may reach proportions where they will reduce the margins, and hence become less lucrative.
The threat of debarment, coupled with other competitive factors in the retail market such as technology offered and the price, product and system performance, product features, quality, availability, serviceability, company reputation, and time-to-market, have lent to the cut-throat competition in the US market. Among the new and existing competitors who have kept Motorola US on its toes are Apple, Cisco, Aperto Networks, Xumii, Qualcomm, Samsung Networks, Nokia, Palm, and Newport Digital technologies. Japanese products, known for their high quality and low price, have also been giving Motorola products in the US a good run for their money. The Japanese products did not have a problem penetrating the US market; however, the same cannot be said for the US products in the Japanese market.
Motorola US has also had other problems to face. Recession in the US market reduced the buying power of the customer, thereby decreasing sales in both wholesale and retail sectors. Further, Motorola was slow in transitioning to 3G, by which time its competitors had finished implementing it. The resizing of its entire corporation, apart from being too lengthy and painful, kept Motorola in the news buzz for a very long time. The buzz in the market is that Motorola's new release in the U.S, the Xoom, is headed for failure. People find Apple's iPad cheaper and better than the Motorola Xoom.
Motorola could look at innovating something new, either a product or a category, as the market is brimming with technology enthusiasts scouting the market for such innovations. It could also concentrate on strong after-sales service, thereby building a good reputation among people. In the future, Motorola plans to work on smartphones, both the top-tier and the mid-tier range. It also plans to introduce 7-inch and 10-inch tablets, and launch the Motorola Olympus, a high-end Android smartphone in 2011. This phone is supposed to be powered by a processor more powerful than the Qualcomm Snapdragon processors seen on smartphones today, and is supposed to be unique in comparison to the Android phones in the market.
This innovation may give Motorola an edge over its competitors, but
- Will Motorola Olympus be a success in the US market?
- Will the Motorola Xoom sales beat Apple's iPad sales in the US, or will it fail?
- Will Motorola innovate again, in order to stay abreast of the breakneck competition in the US market?
[...] The economy pricing point of US$22 per unit is driving the counterfeit segment. India has strong mobile phone market of 600 million units (Datamonitor, 2013). On global basis, counterfeit mobile phone segment slightly reduced to 221.5 million units (2011: 250.5 million units) in 2012. Although, there will be slight decline in counterfeit mobile handsets to 194.6 million units and 173.8 million units respectively in next 1-2 years, it still has negative impact on margins of branded smart phone manufacturers such as Nokia, HTC and Motorola (2013-2014). [...]
[...] ➢ Promotional: In 2013, Motorola Solutions steadily shifted its promotional and marketing focus towards social media and networks from traditional cal and regional radio channels, catalogs, brouchers and direct mailing campaigns. On the other hand, Motorola Mobility is aggressively realising Google's premium online inventories for its promotional activities of existing and newly launched devices. In June 2013, Google proposed marketing and promotional campaign for Moto X worth US$500 million for North America and EMEA markets (http://androidandme.com/2013/07/news/wsj-google-to-promote-moto-x- with-500-marketing-campaign-device-heading-to-all-major-us-carriers- this-fall/). ➢ Pricing: In matured markets, Motorola is steadily reducing pricing of its core and non-core devices. [...]
[...] The three basic pillars of corporate social responsibility stood as (Takala & Pallab p. ➢ Financial: The traditional pillar of businesses was to enhance profitability for its shareholders on long-term basis (Smith, 2003). Corporation worldwide aren't run as not for profit organizations. In 2012, Motorola Solutions paid dividend per share of US$ 0.96 ; with year- on-year growth of 336% (Annual Report, 2012). On the other hand, high debt centric Motorola Mobility has hampered dividend pay-out at Google in past 24 months. Google has paid no dividend to shareholders for past 2 years. [...]
[...] Breach of partnership and alliances will hamper brand positioning. ➢ Changing consumer perception and purchasing behaviour: Motorola has horizontally and vertically diversified smart phone and mobile devices portfolio. Shift of consumer preference towards very low end mobile phones will hamper operating margins. Proper market due diligence on continuous basis is essential. ➢ Product recall will hamper brand positioning: Higher consumer lawsuits will hamper brand image and value. In September 2012, the company recalled Android tablets and smart phones in Germany related to lawsuit of Apple with Samsung. [...]
[...] ➢ Global mobile device shipments touched million; stipulated to reach million in next 3-4 years (2012-2016). Smartphone accounted for of total mobile devices in 2012 (Gartner, February 2013). Samsung is the dominant mobile device manufacturer globally; with market share of 22% (2011: 17.7 followed by Nokia at (2011: 23.8 Motorola is ninth largest with market share of The total estimated core addressable market for Motorola Mobility is US$200 billion stipulated to reach US$319 billion in 2016 (smart phone market value in next 2-3 years). [...]
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