Ups and Downs for Motorola, Sagem and
11th April 2007
Since we made our predictions
at the beginning of the year, there have been three
significant developments for mobile phone manufacturers.
Things are looking grim for Motorola.
The indications are that the Q1 2007 figures from the
company will indicate a loss due to slumping mobile
phone sales, and the loss of several prominent employees
shows that this is a company in serious trouble.
The problem is obvious - Motorola is
wedded to designing phones that look like the original
and is completely in a rut when it comes to design.
With the exception of some low-cost monoblock devices
and some handsets that sell only in Asia, Motorola have
produced endless variants of the same theme.
We recently tried to be positive about
W510 and failed as it is almost completely identical
to the existing RAZR V3i. Recently Motorola announced
the W395, W380 and W375 devices which.. you guessed..
are almost identical again.
The problem gets worse.. when Motorola
announced the RIZR
Z8 they saddled it with the same tired old design
OK, so it's banana-shaped.. so what. We were harsh about
the RIZR Z8, but it turns out to be rather a good phone.
Underneath the dead-end styling that is. What the Z8
shows along with devices such as the ROKR
E6 and the FONE
F3 is that Motorola is certainly capable of being
technically innovative. Even the somewhat unsuccessful
K1 is a fundamentally good phone. But good or not,
they all look too much like the RAZR, and the RAZR look
is definitely out for 2007.
At launch the original RAZR V3 was a
huge success - mostly due to it's iconic design. Originally
the RAZR had a high price tag which meant healthy profits
for Motorola, but as the phone got older then prices
dropped and the RAZR become commonplace. By the launch
of the upgraded V3i, the RAZR was badly out of date
and it compared poorly with other handsets on the market.
When Motorola created the RAZR, they
created a very desirable fashion phone. But they've
tried to repeat the same trick over and over again,
seemingly without realising that the RAZR is no longer
In short, Motorola are demonstrating
all the business agility of the Titanic heading inevitably
towards disaster. We know that Motorola's crew are perfectly
capable of turning the ship around.. but the captain
seems to be determined to press on. And it turns out
that Motorola's passengers - it's shareholders - are
increasingly unhappy with the poor performance of the
We very much hope that Motorola will
turn itself around soon.
Sagem are another struggling business,
and indeed one rumour was that Sagem would be taken
over by Motorola.
However, Sagem has been thrown not one,
but two lifelines. Firstly, rival Sony Ericsson
announced that they would contract Sagem to build some
of their low-end handsets, and then Vodafone
announced a deal for Sagem to manufacture further Vodafone-branded
handsets which should add distinctiveness to Vodafone's
own brand device range.
Sagem can certainly innovate - the my750C
has features that rival anything their big name competition
can do, and the VS3
(one of our favourite phones) shows that they can design
for specific markets quite well.
Even so, 2007 and beyound will be a
struggle for Sagem in the face of manufacturer consolidation.
/ Grundig Mobile
If Motorola is considered a first-tier
manufacturer and Sagem is a second-tier manufacturer,
then Vitelcom was always a third-tier outfit.. but one
that showed promise.
Using their Grundig Mobile brand, Vitelcom
previewed the Grundig
B700 recently which looked to be a very promising
Sadly it looks as though the B700 will
never reach production as Vitelcom has gone into administration
with 400 jobs in Spain at risk. The problem? Simply
that the order books were empty despite all Vitelcom's
efforts to come up with a range of novel and interesting
devices. Vitelcom's collapse is creating shockwaves
in Spain, but it is unlikely that anything can be done
to salvage the firm as a going concern.
Vitelcom is a demonstration of just
how hard it is for mobile manufacturers to compete against
the big names. Sadly, we expect to see many other small
manufacturers follow suit.
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