Not so fast Moto

Past few days, a blaze of publicity has surrounded Motorola. Even otherwise conservative Russell Beattie penned an ode to the new improved Motorola. Well, looks like all it not that great. I was browsing through a press release from IDC and paused for a minute when I saw this:

Although the success of a rejuvenated product line helped Motorola achieve a 52.4% year-on-year increase in shipments, the number 2 vendor still experienced a sequential drop of 4.7% during the second quarter of 2004. With number 3 Samsung close behind and gaining, the success of Motorola’s new business and consumer-focused mobile phones are critical to its continued success in the market.

Motorola executives have said that they want to become the largest phone company again. I am not too sure if they can. Having use some of their phones, which I admit are quite clever, I still feel that company lacks the most important gene – ability to understand the consumer usage patterns and how to make an easy intuitive interface. I have been using the v600 which I admit is a great phone, but when I start doing stuff like sending text messages etc, the whole thing appears a lot more complex that Samsung’s UI. Just as an aside, here are some highlights from IDC vendor performance breakdown and my predictions as to what is going to happen in the next six months.

  • Nokia – Nokia has 27.7%of the global handset market, but things have not been easy. In the second quarter, the company posted a year-on-year increase of 11.8% and a sequential growth of 1.6%. It will continue to give up market share to Motorola and Samsung, and will face margin pressure in months to come.
  • Samsung – Despite fierce competition in the U.S. market, Samsung posted impressive 76.0% year-on-year growth worldwide and a corresponding 1.3% increase in market share to 13.9%. I expect them to take the #2 spot, nudging Motorola down to #3.
  • Siemens – After a dramatic sequential drop of 18.8%, Siemens experienced a corresponding market share decrease of 1.7%. Its #4 position as the number 4 vendor worldwide in jeopardy. Expect it to fall to #6 spot soon.
  • Sony Ericsson – Thanks to a strong shipment increase of 55.0% year-on-year and 18.2% sequentially, Sony Ericsson raised its market share 0.8% from the previous quarter to 6.4%, tying Siemens for the number 4 spot in the market. With a number of innovative new products scheduled for release in the latter half of the year, Sony Ericsson’s will push Siemens down to fifth spot.
  • LG Electronics – With market-leading year-on-year growth of 87.0% and sequential growth of 13.6%, LG increased its market share 0.6% to 6.1% of the worldwide mobile phone market. Separated from Sony Ericsson by just over 500 thousand units through the first half of 2004, LG is within striking distance of its perennial competitor.

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