Rivals bid for dominance in handset market

15 Jan 2003

There are few businesses more competitive than the handset industry. Sales are now running at hundreds of millions worldwide every year.

New technologies and emerging markets mean that there are continual opportunities for expansion. At its annual media conference in Shanghai last week, US manufacturer Motorola outlined its plans for the new year.

Back in the early days of the mobile phone market the company was very much the dominant player and produced such iconic phones as the one Michael Douglas used in Wall Street. However, in recent years it has lost the limelight to Finnish giant Nokia and up and coming manufacturers such as Siemens and Samsung. However, after a period of instability involving job cuts the company is now on the comeback trail. In Shanghai, it clarified the strategy it hoped would return the company to the top of its game.

One of the central elements of the conference was the announcement of new handsets for 2003. First up was the C350, an entry-level handset positioned immediately above the soon-to-be-launched C330. The phone will feature a colour screen, GPRS, changeable covers and polyphonic ringtones. Labelled ‘a colour phone for the masses’ by Motorola executives, the C350 is expected to be available in the second quarter of this year and is likely to retail for around €150 without a network subsidy.

A step above this is the T720i, which will be launched early this year. The phone is essentially an update of the T720, a handset that was never launched in Ireland. The T720i will be Motorola’s first MMS-enabled (multimedia messaging service) handset and features a flip design with a large colour screen. A detachable camera will allow users to take pictures for transmission via MMS.

Several other mid-range phones are also in development, details of which are expected to be announced later this year. The last GSM handset to be announced was the V600, which will act as Motorola’s top of the range model in this sector. The phone will incorporate a 64,000-colour display within the familiar Motorola flip design. Features include a built-in camera, MMS, Java, video capture and Bluetooth. The V600 is also Motorola’s first quad-band phone, incorporating the new 850MHz frequency recently opened up in Latin America.

Also announced at the event was the US company’s second 3G handset. The A385 is a full colour phone with Java capability. Unlike its predecessor, the A380, it will feature an integrated camera. No details on pricing were available at the announcement.

The company was relatively clear about its strategy for getting ahead. First of all, it’s attempting to lower manufacturing costs. Attempting to consolidate its manufacturing methods, it’s concentrating on two standard chipsets, the i250 and i300, both of which use less parts than previous models.

In terms of gaining market share, Motorola is very much concentrating on emerging markets. It’s no coincidence that it chose China as the venue for this year’s conference. With a population of over 1.2 billion, China is the world’s biggest handset market and Motorola is currently the market leader there. With such a large population, even a small slice of the Chinese market could prove extremely lucrative for any manufacturer and Motorola currently holds the top spot. Other emerging markets such as Russia, Turkey, South Africa, Nigeria and Argentina have also been targeted by the company.

The third big plank of the company’s strategy is marketing and this is an area in which it has invested heavily. Former Nike guru Geoffrey Frost is now on board as corporate vice-president of global marketing and communications and he’s hoping to apply what he did with trainers to mobiles. Design now plays a huge part of the company’s strategy and is something that it considers to be a differentiator. Frost presented a marketing strategy that concentrated on style over technology and focused on the phones as aspirational products.

Pictured: Motorola’s C350

By Dick O’Brien