Motorola
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Source : http://www.icmrindia.org
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last activity : 07 06 2010 20:18:04 +0000
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A brand doing so well was taken over by Nokia , why what happened
What were the factors that contributed to this :-
In July 2007, Motorola Inc. (Motorola), a major communications company based in the US, announced its financial results for the second quarter of 2007. The company reported a loss of $28 million on sales of $8.7 billion in the quarter, compared to a profit of $1.3 billion on sales of $10.8 billion in the corresponding quarter of 2006. Motorola blamed the disappointing results on the poor performance of its biggest business unit - Mobile Devices - where sales had fallen by 40 percent to $4.3 billion.The sales of the Home and Networks Mobility unit and the Enterprise Mobility Solutions unit, however, had increased by nine percent to $2.6 billion and 42 percent to $1.9 billion, respective
In the second quarter of 2007, Motorola had shipped 35.5 million mobile handsets. In contrast, Finland-based Nokia Corporation (Nokia) had shipped 100.8 million handsets (an increase of 29 percent over the corresponding quarter of the previous year). As of the second quarter of 2007, Nokia was the leader in the global mobile phone industry, with a market share of 38.0 percent.
Motorola, with a 13.0 percent market share11 was in third position, behind South Korea-based Samsung Electronics Inc. (Samsung), which with a 13.7 percent share, had overtaken Motorola for the first time
The fall in Motorola's mobile phone shipments was attributed to slowing demand for the company's phones in Asia and Europe. Nokia, on the other hand, witnessed an increase in demand because of the popularity of its phones in the booming markets of China and India. According to analysts, Motorola had not been able to maintain its momentum after the launch of its last successful product, the Razr, which had debuted in August 2004.
The products that followed the Razr had been lackluster, and competitors had been quick to copy the Razr's best feature - its sleekness - in their own phones. In late 2006, Motorola cut the prices of its phones in a bid to increase sales and market share, but this only led to an erosion in margins and lower profitability for the company.
Motorola had warned in early 2007 that its performance in the first half of the year would be 'rocky'. It also echoed analysts' opinion that the mobile devices unit was unlikely to turn around until 2008. The company's poor performance increased the pressure on Motorola's CEO Edward Zander (Zander) and analysts speculated that the board might want to replace him in the near future. Zander, however, seemed confident about improving Motorola's performance. "I think we're doing the right things. The management team is working real hard. We have to start demonstrating that we're making progress," he said soon after the second quarter results were announced |
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