Moto, Chasing Nokia

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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