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Summary:

This was a big week for wireless earnings and market figures, with Motorola grabbing the spotlight from Nokia in the ongoing battle between the two dominating global cell phone makers. Motorola, still milking the success of the Razr, gained significant market share in its attempts to […]

This was a big week for wireless earnings and market figures, with Motorola grabbing the spotlight from Nokia in the ongoing battle between the two dominating global cell phone makers. Motorola, still milking the success of the Razr, gained significant market share in its attempts to catch up with Nokia. Strategy Analystics says in a research report today that Motorola’s market share in the second quarter of this year reached 22.1%, up from 18.1%–Nokia grew more modestly to 33.3% from 32.5%.

The companies’ earnings matched those figures. Motorola said it brought in $10.9 billion in revenue, a growth of 29% from the second quarter last year, and–even better–earned $1.38 billion in profits, up 49% from last year. Nokia said it generated $12.4 billion in revenues, with $1.4 billion in profits, up 22% and 43% respectively from the previous year. Motorola stock rose 7% on the news.

Two things come to mind from the announcements. First, that the rivalry is getting tougher between Motorola and Nokia as the companies both work on dominating both high-end 3G replacement phones and lower-end models in fast-growing markets. Both companies are opening global stores in competitive markets, rolling out design conscious models that are finding popularity and spending major money on marketing. The ultimate battle will come over China, as both companies are gaining sales in the country.

The other note is that the two companies’ strategies are both working pretty well, compared to the rest of the industry, as Motorola and Nokia increase the distance between themselves and the three trailing cell phone makers, Sony Ericsson, LG and Samsung. The market share between Motorola and the third place maker Samsung was at its largest gap since 1999, points out Strategy Analytics.

Motorola also announced a savvy partnership with Yahoo today that will embedd “Yahoo Go for Mobile” on some Motorola cell phones. A move like that could gain more of Nokia’s customers. Nokia better watch its back!

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  1. I wonder how MOT and Nokia are doing with regard to phones that also deal with push email, to compete with Blackberry? Sony-Ericsson has been delayed in releasing their push email phones if I’m not mistaken and it would seem that the phone companies would want to offer phones that can attack the Blackberry market slice.

  2. Concerning MOT’s agreement to bundle “Yahoo Go for Mobile” on devices starting in 2007:

    Nokia already has a similar deal. In fact, there’s at least one Nokia handset available today from Cingular that includes the Yahoo bits. It seems more like Motorola’s playing catch-up with this rather than gaining share on NOK.

  3. “It seems more like Motorola’s playing catch-up with this rather than gaining share on NOK.”

    Huh?

    Om points out that Moto has closed the marketshare gap signifigantly (33.3% NOK, 22.2% MOT). Introducing a feature second into the marketplace has nothing to do with gaining market share. Besides…why would anyone want Yahoo on an ugly nokia phone when I can get it on a beautiful razr or pebl or slvr or Q??

  4. I would like to point that Nokia is already advertising its N70 model here in India with Yahoo! Go. It seems they(Yahoo!) also have a partnership with Nokia.

  5. Motorola and “high-end 3G phones” isn’t a combination I’m aware of, they don’t make any high-end phones, and their 3G range is very sparse, about all they’re doing right now is new colours for the tired old low-end RAZR.

    There’s only a limited market for chav-phones, Moto will be hitting that barrier hard very soon.

  6. Mick McQuilton Friday, July 21, 2006

    Nice earnings from Moto. Now if they could just see their way to better quality in their handsets (how about focusing on the newer, better charger interface) we wouldn’t have to replace them every 18 months. Or maybe that’s the idea.

  7. Jesse Kopelman Friday, July 21, 2006

    Yes, Nokia has Yahoo Go support now, vs. 2H07 for Motorola. As for Motorola and high end phones: The so-called Ultimate Media RAZR is about the most advanced non-smart phone you can buy in the US. The CDMA version has got EVDO so it is definitely a 3G phone. There is also the Motorola Q smart-phone — Windows Mobile 5.0. EVDO, and push e-mail. Clearly one’s view of Nokia vs Motorola is shaped by whether they live in the US or not. Nokia is on the way out of the CDMA market and thus have a low profile with half of the US market. On the other hand Nokia is far stronger than Motorola in GSM and especially UMTS (which is still a non-issue in the US), so outside the US and the Far-East Nokia is rightly seen is the dominant player and Moto as a weak also ran.

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