Motorola (MOT) has introduced a slug of high-end phones that range from a thinner version of the RAZR to a new multimedia handheld device to compete with Blackberry. The phones look good. No denying that . But, they have an interesting target. “These phones are aimed at classy users we haven’t been addressing,” said Motorola’s chief executive, Edward J. Zander.
The high end of the market may have a good yield-per-unit, but it is the slowest growing part of the market, and one of the most competitive. It is where Sony Ericsson has made most of its money. It is where the iPhone is aimed. And, Nokia has a number of models for the more affluent users.
The market growth for handsets is in countries like India and China. The US and Europe are nearly saturated. The top three cell service providers in the US have about 175 million customers. That does not leave much room for new bodies.
It is not bad that Motorola has put together a line of high end handsets, but until it is matched with cheap phones with reasonable margins aimed at the growing end of the market, Motorola can never move toward a complete recovery. With Nokia’s (NOK) market share at 36% and Motorola’s at 17%, attacking only one part of the market won’t work.
Douglas A. McIntyre
Contact [email protected] for any questions or corrections.
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