11/12/2008 12:11:00 PM
Motorola needs to take risks
Consolation comes in many forms, but a common phrase said by many looking to cheer up friends in struggling companies has been ‘well, be thankful you’re not at Motorola’. The handset division of the company posted a £530m loss between July and September, and the company has been gradually losing confidence, ideas and talent over the last two years.
A much-needed comeback plan has emerged this week. On the surface, the tactic appears utterly insane and risks alienating the wider industry. But the plan hints at a realisation of the company’s current position, rather than wallowing in former glories. It is at a standstill and needs to start from scratch.
It is true that selling only in O2 and Carphone will bring focus, make it easier to manage the supply chain and marketing activities. It is also a reflection of how the market is changing with manufacturers working much closer with operators in exclusive tie-ups. RIM, HTC and Apple have been at the forefront of this trend. Nonetheless, there is a huge risk but Motorola is at a place where it needs to take risks. More pressing is the simple fact that Motorola needs to make some decent phones.
It sounds so obvious, but Motorola is the worst culprit when it comes to ignoring this basic belief and not knowing who its customers are. For a long time, it has danced to the tune of the operators, referring to them as customers and forgetting that its fortunes are won and lost by the end users. If it thinks intelligently about the demands of the end user, it won’t make a difference which operator it does and does not partner.