Motorola was once a juggernaut of the cell phone world. Nearly everyone you talk has had at least one Motorola cell phone at some point in their cellular life cycle. The Motorola Razor was a huge success, the phone sold well beyond 50 million units and this padded the Motorola board room with fine wine and cheese. When one has a successful product its common place to ride that success into the ground (think tickle me Elmo). Motorola's problem was that they not only rode that success into the ground but they rode it so far into the ground that they were blinded by their own success.
Lets first look at the many variations of the Razr; this is where Motorola's downfall began. The variations included; V3. V3i, V3r, V3t, V3im, MS500, V3re, V3c, V3m, V3x, M702iG, V3xx, M702iS. Some of the variations are carrier specific models but regardless it shows how many different variations of the same phone Motorola released to the general public. Many of the models had slightly upgraded specs or an update to the operating system. While this practice is a common business model in the auto industry it does not work for the cell phone industry.
The build quality of the Razr was nothing short of terrible. A survey by Mobile, 78% of RAZR users would not buy another Motorola handset because of poor usability. This figure was even higher for first-time users. One company ranked it 11th out of 13 for ease-of-use, when compared to competitors' products the RAZR required extra steps and had poor usability, meaning that users had a 47% success rate for a given task. With such terrible user quality issues, it can be easily observed that the success of the Razr was due to it being a fashion accessory.
Motorola riding off the success of the Razr decided to ramp up production of other phones. They were modeling all their new offerings off the old success of the Razr. The Razr offered something new, incredible thinness for its time, but Motorola's other phones offered no such innovation. Taking a blind stab into Motorola's current handset lineup (excluding smart phones) you find nothing revolutionary and all are incredibly bland.
Motorola has vested little interest into a new OS; it has been essentially the same bland old OS. With the release of phones from Apple, HTC, and RIM all featuring slick new UI's, faster user integration and high build quality Motorola's offerings have fallen behind. The targeting of the low slung mobile has failed on massive accounts for Motorola. The essential idea that there is a strong demand for no feature low cost handsets has not prevailed. The profit margin for these phones resides on the idea of high volume and low margins to make up for the lower cost. When Motorola couldn't move the quantities needed jobs were slashed.
Motorola has been slashing jobs and is placing large bets on Google's new mobile OS Android. The OS does offer a huge potential but Motorola will not have a cell phone running the OS until 2009. The T-mobile G1 has stolen the spotlight for being the first phone with the OS. It garnered that spotlight because it was the first out the door but it can be described as an ugly duckling. HTC will pump out new handsets with Android and they have a long standing history of highly attractive looking phones with solid features. Motorola is banking on Android but does not have the same reputation for quality and design, its like putting brand new hardwood floors in your house but forgetting to fix the broken windows. People will see your broken windows and will never come in to look at your new hardwood floors. Android is representative of the hardwood floors as Google will help to create the open sourced OS but will not fix the broken windows, the phone design, of Motorola.
Motorola has a long way to go to gain consumer confidence. They fundamentally have the wrong business model and unattractive phone designs. If they want to get back on the game they need to increase quality, phone design and implement Android with feature competitive phones into the market. Do this and times will turn but until their phones can stand the test of two years (standard phone contract) without replacement, jobs will continue to be lost.
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