Motorola: A comeback kid?

Motorola is trying hard to make a comeback in the handset segment with the launch of Droid and Cliq, two high-end phones.

Motorola had been struggling to get a supermodel smartphone to regain its market. The Cliq and Droid duo has given some fresh oxygen into its market. The last time it had a great handset success was with its MotoRazr long time back in 2005. The company was not able to come out with a product which captured the imagination of the market the way Razr did and consequently kept on losing marketshare to the advantage of iPhone and other players.

In September, Motorola launched Motoblur solution with Motorola Cliq phone to sync contacts, posts, messages, photos, etc from sources such as Facebook, MySpace, Twitter, Gmail, work and personal e-mail, and LastFM. The Cliq is developed on Android open source platform.

In a month time gap, another phone developed on Android open source platform, Motorola Droid, a Verizon exlusive phone, was launched on November 6, 2009. Droid, on the other hand, is built on one step advanced version Android platform compared to Cliq and the company boldly campaigned targeting Apple iPhones and other smartphones in the market. When Motoblur was launched exclusively with T-Mobile USA, it went well exceedingly well according to the reports. The same smartphone will be made available in different name “DEXT” in UK, France, and Spain.

The latest duo has made a strong initial mark in the smartphone market segment with its slick, innovative, feature rich devices. For Motorola, using Android open source operating system is an another advantage, as it saves the license cost also for the company.

Apart from this, the open source platform provides a lot of required flexibility to customize and extend the capabilities of its devices. Industry sources believe that Droid and Cliq are likely to offer good competition to the smartphone leaders like iPhone and Blackberry. It is critical for Motorola to gain a stronghold in the smartphone market since the share of smartphone is consistently increasing in this market.

The success of Droid and Cliq is critical to the comeback aspirations of Motorola. It is also important for Droid to capture the festival season market. Apple shipped around 1 mn handsets in the first quarter of its availability and Droid and Cliq might have to record similar volumes to make some impact in the market.

In the third quarter results it posted a profit, though it was only a penny per share. It is certainly injecting some oxygen into its sliding market in handset sales. The handset player has been witnessing a decline in handset shipments of almost 50%, and consequently huge revenue loss.

The company is having a hard time in the Indian subcontinent as well. Motorola has witnessed the erosion of its marketshare from 11.1% in 2006-07 to 3.9% in 2008-09, according to V&D 100. Droid is likely to be launched in the Indian market in the first quarter of 2010.

The launch of two smartphones won't be enough for the company to make a comeback. Motorola would need to consistently come out with more products to regain the lost ground. The Indian market also awaits the launch of Droid and Cliq. It remains to seen what can be the impact of these handsets in the country.

These moves seem very much calculated strategies to regain its market position from a declining phase. But the company has to go a long way when we see its small profit in its third quarter results.

kannan@cybermedia.co.in