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Motorola’s Wayward Path
February 01, 2008
Exploiting the Razr’s appeal instead of introducing another breakout hitled to a dead end
It was shortly after Motorola Inc.’s Edward Zander declared “more Razrs”that the mantra started to backfire.
Zander, then CEO of the Schaumburg-based technology giant, was riding astupendous crest in July 2006 when he was asked what was next for Motorolaafter the hit Razr mobile phone.
“More Razrs,” he said. “It is something we are going to continue for quitesome time.”
Competitors followed suit, turning the thin, must-have phone into acommodity now found for free.
Nothing has been the same since for struggling Motorola, which saidThursday it is considering restructuring the company, including whether toseparate the mobile phone division from its other businesses. That meansMotorola, one of the most prominent names in technology, could exit the phonebusiness it pioneered by seeking a buyer.
The problems for the tumbling phone division are complex, but one thing isclear: It was a fateful decision to exploit the Razr’s success with a seriesof phones - the Krzr, Rizr, Slvr, Q and now Razr 2 - that mimicked theRazr’s style but not its original cachet.
The company couldn’t follow up with another breakout hit, market share andthe stock price have plummeted, Zander left the top job in December and nowthe future of the company is uncertain.
“Motorola lost their way,” said Karen Norkus, a senior sales representativefor a Chicago Verizon Wireless store. “Customers started shying away from thembecause there was never anything strong after the Razr.”
Customers also aren’t clamoring for the Q smart phone, she said, notingthat she sold three BlackBerry models on Thursday.
“Sales for Motorola’s smart phone have gone down,” she said, referring tosales at her Michigan Avenue store.
Aza Raskin, a Chicago software designer who recently joined the MozillaFoundation, a Web programming concern, said Motorola seemed to rest on itslaurels.
“If you talked to people when the Razr first came out in 2004, they lovedhow thin it was. It had a sexiness to it,” he said. “It was groundbreaking butthey couldn’t follow up.
“So the question is, ‘What comes next?’”
‘Beholden’ to carriers
And in Raskin’s view, he would work on breaking down Motorola’s reliance onproviding U.S. wireless carriers with products to suit their needs, and focuson meeting consumer needs, as mobile phone-makers do elsewhere.
“The cell phone-maker is beholden to the carrier in this country,” he said.”I know Motorola has a lot of cool stuff in its labs. I’ve seen it. But itmust be frustrating because they have to make what the carriers want.”
But Jack Philbin, president of Chicago’s Vibes Media, remains bullish onMotorola’s potential to rebound from its current woes. His company, whichspecializes in text-messaging services and has relationships with carriers andphone manufacturers, said the potential for a turnaround is in place.
“They are a dominant handsetmaker with an existing distribution channel,”he said.
“All it takes is a big hit. But then you have to follow it up,” a nod tothe stumbles the company made in the wake of the Razr’s success.
“If the Q had been another hit, we’d be singing a different tune.”
