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Vodafone (VOD) is going into the handset business and that has to make the big companies in that industry, Motorola (MOT) and Nokia (NOK) more than a bit nervous. The sweat is probably more profuse at Motorola where the company is losing global market share.
Vodafone now has its own inexpensive handsets for emerging markets and higher-priced ones for 3G. Asian manufacturers are making the phones for the huge cell provider. Vodafone projects that the phones could be over 30% of its sales.
Vodafone is the world’s largest cell service provider, so the move has some real gravity with its suppliers.
Motorola is now faced with building phones that can get back share, a lower stock price, and losses in its core business. Vodafone just made the US company’s problems more acute.
Douglas A. McIntyre
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