RAZR loses edge

5 Apr 2007

Motorola is losing its share in the Irish market with only 15pc of mobile users choosing its product while Nokia surges ahead with 66pc of the market share, according to a survey published yesterday by iReach.

Motorola recently reported a drop in first-quarter sales of US$9.2m to 9.3bn, down from reported sales in January of US$10.4m to 10.6bn. This comes at the same time as a change in middle management and the loss of 3,500 jobs.

“The same things that hurt Motorola in the fourth quarter, a lack of compelling high-end phones and intense price competition, seems to be crushing it again this year,” said Sinead Daly, business research analyst at iReach.

In comparison, Daly said that Nokia’s 66pc Irish market share reflects the range of models throughout the pricing spectrum from low-end, ideal for teenagers with a budget, to high-end, for those with disposable income.

Initially Motorola had great success with its high-end, slim-line RAZR model. “The RAZR started the thin, fashion phone trend and was the world’s best-selling phone.”

However, Daly noted that other phone companies began to produce similar offerings at a lower price, rendering the RAZR uncompetitive.

When asked if Motorola would benefit from venturing into the low-end mobile market, Daly said that the company has made it clear with their international policy that it is not prepared to do this.

“Price cutting is intensifying on the market’s lower end, particularly in developing countries, and Motorola is refusing to engage in price wars on the lower end, claiming that it’s too hard to make money there.

“This refusal coupled with their absence in the high-end market and a limited 3G product portfolio are making it extremely difficult for Motorola to remain competitive,” said Daly.

By Marie Boran