Feeds

Dismal Q2 evidence of deeper problems at Motorola?

The search for seamless mobility

The Power of One Infographic

Comparison with Nokia

Motorola can learn some lessons from its Finnish rival though. Nokia, which had its own dark days a couple of years ago and suffered severe loss of shareholder confidence, has proved masterful at identifying and accelerating markets that play to its innate strengths, while also diversifying its revenue streams. The Finnish giant has put software at the heart of its strategy far earli

er than any other phonemaker and is using that advantage to drive standards and to move into sectors that are inherently software focused, such as mobile web services and enterprise mobility (this is an instinct it share with Qualcomm). This automatically pushes Nokia up the value chain and brings it closer to customers than it could be with pretty devices alone, and it is also enabling it to turn the potential risks of the open mobile internet model to its advantage.

While Motorola has been active in Linux and Java developments for handsets, Nokia has gone several steps further, creating user interfaces and browsers that will help define the whole mobile web experience and make it sufficiently friendly to drive commercial success.

All this places Nokia in a strategic position to which Motorola currently cannot aspire, and the Finnish company can also turn its famously efficient supply chain logistics and its phenomenal buying power to its advantage. Thus it has been able to strike the tricky balance between margin and volume more effectively than most, partly because of clever planning, but largely because of its efficiency, which enables it to have a massive market lead in the most priceaggessive market on earth, India, without resorting to ultra-low cost handsets or sacrificing too many points off its margins (they did slip a little in the last quarter, to shareholders’ consternation, but as nothing compared to those of the non-European phonemakers).

Motorola’s strengths

Motorola has advantages that Nokia does not have, though, but needs to exploit them better.

Most notably, if Nokia is creating what it hopes will be the de facto platform for one key carrier trend, the mobile internet, Motorola has in place many of the elements to make a similar platform for the other key trend, fixed/mobile convergence (FMC) and quad play. It has a unique combination of products, channels and customer experience that spans broadband wireless infrastructure – once seen as a niche, now becoming mainstream thanks to WiMAX; cable operator equipment; some fairly advanced IP Multimedia Subsystem work; enterprise systems such as the Symbol WLans and a key partnership with Microsoft; and of course the handsets.

On Motorola’s slideware, all these elements converge neatly to form an end-to-end system ideal for any FMC carrier, whether wireless, cableco or telco. In reality, the product lines still seem to operate rather separately, and there is the risk of losing a natural lead to another multi-faceted rival such as Alcatel-Lucent, and of overrelying on the flagship converged customer, Sprint Nextel (although a great stake in the ground for convergence, the Sprint-Pivot venture will have to grow at a very rapid rate to represent growth for Motorola, given that Nextel was always its largest customer through the iDEN system).

Convergence is the natural future for Motorola, and it is assembling a range of offerings that should be the strongest in the market, boosting this with acquisitions such as that of Leapstone (see separate item), and with a remaining heavy commitment to R&D, even to the extent of creating its own WiMAX handset chips.

Nobody doubts the company’s credentials in this area, or its engineering abilities, but logistics remain an issue, in a world where its largest business, handsets, must increasingly be run as a lean consumer electronics operation with heavy focus on cost efficiency and brand design, rather than expensive R&D. This is something Nokia understands, as of course do Samsung and Sony Ericsson, with their CE heritage.

Motorola needs to understand it too – unlike Alcatel and Siemens, and in some ways Ericsson itself, handsets are too large a part of its revenue for it to exit that tough consumer-driven market to focus on the more friendly waters of infrastructure and convergence. But the situation imposes a schizophrenia on the company that its rivals have backed away from – even Nokia, by putting its infrastructure into the Nokia Siemens venture.

The Essential Guide to IT Transformation

Next page: Future of handsets

More from The Register

next story
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
Google Nest, ARM, Samsung pull out Thread to strangle ZigBee
But there's a flaw in Google's IP-based IoT system
Microsoft unsheathes cheap Android-killer: Behold, the Lumia 530
Say it with us: I'm King of the Landfill-ill-ill-ill
All those new '5G standards'? Here's the science they rely on
Radio professor tells us how wireless will get faster in the real world
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.