Motorola 2007 ushered in the "hard times"

World marketing comments (http://mkt.) Motorola 8 June opened huge layoffs. The wireless radio TNC has closed the software development center located in Montreal, and the center of 225 posts. Prior to June 2, Motorola announced layoffs at the global and then four thousand, so that the total number of expanded to its laid off employees in 11% of the total.

July 2, 2007, China's first mobile phone battery explosion explosive lethal events that belong to the Motorola brand mobile phone mobile phone, mobile phone battery does not fall within the plant licensing of original battery, according to Xinhua News, Brazil in the past two months there have been at least five mobile explosion, 5 explosion of mobile phone is the Motorola brand, may provoke originating in non-original battery.

Since 2007, Motorola continued to outgoing bad news, it hoped that the compression operation cost the company out of the predicament, but from being bent, it is not necessary to remove a few hump baling, clearly not the way to genuine gold-straw.

Big layoffs and a major reshuffle

Motorola in 2007 January release of fourth quarter 2006 results show that when the quarter revenue 118 million, net profit declined 6.24 billion, an increase of 48%, to the lowest level since 2004. Its CFO David · DeVaughn Raschel also announced the first half of 2007 the company will lay off on a global scale, accounted for about 3500 people its global employees (6.6 million) of 5%, and the next two years will be spending $ 400 million. From the fourth quarter of 2006, operating margin target of Motorola has dropped to 4%-5%. In mid-October 2006, its market value has shrunk by about 1/3. "Our fourth quarter operating income expressed disappointment. "Motorola Chairman and CEO Edward · Jan de said that the company will strive to make operating margin in the second half of the return to two digits.

But in April, the Motorola's first quarter results worse: revenue 94.3 billion, net loss of $ 1.81, expected second-quarter revenue also declined 14%. Jennifer de have to admit: "after a comprehensive evaluation, we concluded that to mobile phone sector performance to an acceptable level, may require more time. ”

In most rely heavily on the Chinese market, Motorola's market performance equally poor — even a direct impact on the production base is located in Tianjin economic development area, it is understood that once the development zone in the country but in the first quarter of this year's GDP rankings also significantly decline.

In addition to large-scale layoffs, Choi reported poor also led Motorola management shake-up. In February, Motorola mobile phone Department of former President Ron · Gary Stix job-hopping joined Dell; March, 61-year-old DeVaughn Raschel announced retirement, Thomas Margaritis · MO was appointed as Deputy CFO. In addition, Motorola has also appointed President of the network and enterprise business as Porto Alegre · Brown President and COO.

From Taiwan the Pao's latest reports that three Motorola executives in Asia Pacific, China Taiwan and Hong Kong mobile devices business, Vice President and General Manager of Kinson Loo Kin Sang, Beijing channel business unit General Manager, Xiao cheng Commission and is responsible for strategic growth promoting Asia Department Vice President Kong Xiang-Hui will be left.

Mobile phone is the Motorola three business (mobile terminal, network and business communications, broadband networking) principal, approximately its revenue by 2/3, the main results of dismal is mobile phone business growth momentum. "The mobile phone sector performance is hard to accept, in mid-February 2007, our decision will no longer be competitors price war, the company will no longer cut cell phone prices. "Jennifer de said that Motorola will pay more attention to the profit margin, not excessive pursuit of market share.

He said. "We cannot just for market share and the pursuit of market share. "The common sense, why has undergone a hundred of Motorola today take?

Hostel profits take market share

Since 1998 is Nokia claimed the wireless communications industry leader position, Motorola has always been committed to catch-up. In 2003, its market share fell to 14%, in the Valley of industry heavyweights as Motorola Janders person, he put the mobile phone sector operators the power to act speedily by Gary Stix. Garry Maddox believed that a market share of the profits, he has worked to expand its market share as its primary task, even at the expense of profitability.　This strategy, the Motorola rapid rise in market share, operating margin was falling circles. Motorola is the first response to GSM Association's global mobile push knockdown ULCH (ultra-low-cost handset) plan. With Nokia in emerging markets "decisive battle low-end", which since 2005 has in India, Southeast Asia, and Africa region launched a $ 30-40 mobile phones. In the Chinese market in early 2006 in the Motorola phone each average price in 1600 Yuan, by the end of the year, the average price of only about $ 1000; and Nokia with time periods each phone has fallen by an average selling price is less than $ 100.

But Motorola found still can't win a price war with Nokia. In each quarter of the new 700 million mobile users in India market, sales of low-end mobile phones Motorola scale has not been a threat to Nokia, which still occupy India more than 60% of market share. But in the global market, in the first quarter of 2007, Nokia's market share as high as 35.7%.

July 2, 2007, China's first mobile phone battery explosion explosive lethal events that belong to the Motorola brand mobile phone mobile phone, mobile phone battery does not fall within the plant licensing of original battery, according to Xinhua News, Brazil in the past two months there have been at least five mobile explosion, 5 explosion of mobile phone is the Motorola brand

That may originate from non-original battery trouble.

In the mobile phone industry profit rate increasingly low of brutal competition, firms must get through compression costs. Productivity of powerful Nokia phones annual output is more than double that Motorola, the efficiency of its control costs in the industry is also the most high. But Motorola more than 40% of the mobile phone manufacturing business, which has been outsourced one mobile phone per million working hours required is much higher than that of Nokia, and other major competitors. Because of its production costs rendering of rigid, Motorola price strategy to achieve the "scale".

From the low-end market, the Motorola high-end handset prices naturally has now highboard diving. Its flagship Razr thin prices from $ 800 to a less than 50 dollars, some operators even complimentary. Razr series of best-selling mobile phone Motorola has been making shipments reached record 6570 million units, global market share rose to 23.3%, compared to net profit was down 48% market share has not been able to raise its profitability. Statistics show that Motorola each sales of 50 million Razr mobile phone Department, profitability only 11.2%, far below the average of 18% of Nokia's profit margins.

Crazy price short-term behavior greatly shortened product life cycle, requiring subsequent product must promptly "hosts", or market share would be "unable". But after the Razr, Motorola on April 1 this year — and then not have eye-catching performance introduction of best-selling products, consumers are unwilling to spend more money to buy the upgrade models Pebl Razr, Krazr, Rizr and enables Motorola phone business holiday sales season isn't doing well in the mobile phone shipments to 4540 million.

To the first quarter of this year, Motorola in global handset market share from the previous quarter 23.3% decline to about 17%. This is an embarrassing outcomes: a ever to expand market share as its strategic objectives and therefore large price, eventually in the fierce's "Red Sea" throw good soldiers. In the recent analysis of National Conference, Motorola Razr and other high-end handsets recognized price decline, and the low-end mobile phones in emerging markets face strong challenges that resulted in this quarter handset business slump.

Motorola step wrong

About Motorola's dilemma, there are various explanations of the industry. Some analysts believe that the speed of innovation in today's competitive benchmarking of the mobile phone industry, Motorola cannot be sustained, large-scale introduction of the new leading position, the fundamental reason for this is that Motorola has a technology-oriented companies to design a home in the first place. "Former Motorola have extensive product line, but in recent years it big bet a few models that ignore the gamblers don't always win common sense. "A professional analysis of the continuity of Motorola in strategy, implementation of the thoroughness and the process of standardization, and the gap is large compared to Nokia.

Another view was that the competition is so fierce mobile phone industry, have defined company must have a precise market positioning. Nokia and Motorola belong only two household a brand covering high school low-end series product manufacturers, but Nokia in reasonable arrangements high to medium range product line, has introduced new products and as far as possible extend product areas such as high-priced period, clearly superior. Nokia under different series of mobile phone market, respectively, have different fine mapping, high-end product line of substantial price reductions. never Motorola nearly two years of almost all mobile phones, it is a replica of the Razr series and neglected the continuous technology innovation and market segments.

"In the Chinese market, Nokia in various price ranges are far ahead of Motorola. While both Nokia or Sony Ericsson, in providing Multimedia Fusion features high-end cell phones are better than the Motorola do better. "Telecommunications advisory bodies in charge with BDA China.

People see that, if the product mix and cost structure arranged properly, mobile phone manufacturers could improve profitability and increased market share of the balance between. Such as rising star Samsung, in technology and design both as high-end mobile phone types currently provided, update the fastest. From an individual employee's average profit contribution, Samsung is much higher than that of the Motorola. The fifth-highest in the market by Sony Ericsson is most likely to be a strong opponent of Motorola, the first two years of losses, its development at an increasing rate, according to Gartner's latest report, the first quarter of this year, its market share has reached 8.4%. In addition, Motorola high-end music phone is also confronted with Apple at the end of June the iPhone Grand listing of overwhelming combat.

Currently, besides of layoffs and change, Jennifer de has not come up with more specific programmes. Motorola history first outside CEO, he also came to a career in the greatest danger. Competition white-hot mobile market does not tolerate multiple failures, the Motorola Board of Directors has appeared the discontent. Goldman Sachs analyst Thompson believes that Motorola to recapture market share, while double-digit margin, you need at least three years. In the past three years failed to lead Motorola's predicament, CHIM de could get new opportunities in three years?