Analyst: Motorola may exit handset business
By Thomas Ricker 
posted Jan 29th 2008 6:32AM
posted Jan 29th 2008 6:32AM
Hey, that's what Nomura International analyst, Richard Windsor, told his clients in a note published this morning. Instead of handsets, Moto may choose to refocus on becoming an "enterprise and government company." While on a roll, Richard also raised speculation that a Chinese company might scoop up the troubled Moto before calling it "unlikely as those vendors don't have much of an idea how to fix Motorola's problems." Problems he attributes to the platform and software, not hardware. Man Moto, what a long hard fall it's been since your 2005 RAZR heyday.
Yea, they are just embarrasing themselves. I mean they released popular products that were either too slow to use (Razr) or didn't last half a day (Moto Q).
JAmerican
I agree. Although the RAZR was insanely hot when it came out it was a pretty crappy phone. The same goes for most on their phones. they are slow, the UI sucks and they are lacking in specs and features.
Double agree. I've always said they made decent looking phones, but their software has always been slow/lacking. I went on a tour at Motorola in Shaumburg, Illinois. They had a full display of "future" phones. I found most of them to still have the slow software. I even mentioned it to the tour guide.
Anyone ever get sick of the 3 side buttons on the razr,v300, etc.? My damn v300 in my pocket kept changing sound profiles in school, had to glue them.
I've got to disagree. The Razr was a great *phone*, it just wasn't a very good *gadget*.
For my use at the time, I needed a cell phone that was just a solid reliable cell phone. And it worked wonderfully for that.
I'm actually a big Moto fan. I'm a cheapskate so I always get the free phone when my contract renews/expires, and I remember ~4 years ago I got a V300, and it came with a standard USB port on it, AND supported MP3 ringtones. I had friends with more expensive phones who envied my custom ringtones and didn't want to pay the $70 for the proprietary hookup for their phones. Moto has continued putting the standard USB port on their free phones, and I've continued using them. You can't even get ringtones on an iPhone for free without some hacking :-P
I used to work at the ill-fated Motorola. They are an outstanding hardware company. They are an absolute craptastic software company. Manufacturing isn't their forte either but thats another conversation. The general user could never know this but the hardware had plenty of horsepower actually....its just that the software was so poorly architected and bloated with legacy support that the user experience sucked.
The cellphone business is their bread and butter. Public safety equipment or their infrastructure businesses don't have the sales volume to support the current revenue. Their automotive business could've been more profitable had they given it a little TLC.
If they do exit the handset business instead of just selling it off....there are going to be a sh!t load of laid-off folks. Yikes.
Yeah as far as a Phone goes, the RAZR was excellent. The battery life wasn't bad, the reception was good and it looked nice as hell back then. It was a good phone, but not much more.
Couldn't agree more.
I have a A1200i, which has really great and stylish hardware, with a beautiful, sharp and colorful touchscreen. And a transparent flip, which I think was an excellent idea.
But the OS is the very crappy EZX, based on Linux, with no official support for native apps. There are only a few dozens of them, and most of them are really amateurish. All official apps are Java, which makes the 312 MHz processor work like it is 33.
Linux + Java is a very bad idea, too bad Google doesn't think so.
Anyway, even if Motorola doesn't go out of business, I'll never buy a phone from them again.
I do have the S9 headset and it's just wonderful though, because it's mostly a hardware product. Too bad the EZX platform has serious issues with A2DP, so ironically if you want to make the most out of the headset you have to use a non-Motorola streaming device.
Best use of MS paint ever.
lol. I doubt enGadget uses MSPaint, being the Apple fanboys they are.
I am an Apple user (possible fanboy). I still have respect for MS paint.... best program they ever built!!
or gimp
I think it might be a toss up between paint, notepad, and calculator... all 3 are in my quick launch
Exit the handset business..... and then do what?
Cable TV STBs? Cable Modems? They are also a huge player in public safety communications systems. I would imagine that supplying radios to police and fire departments is much more profitable than trying to compete in the crazy cell phone market.
Um, they still have the chip fab business.
@Randy
They haven't had a chip fab business since they spun off Freescale semiconductor is 2003/2004.
What they should do is quit making cable boxes. My Comcast box is the biggest load of crap. The thing is bulky and there is no HDMI.
Don't forget they supply the headsets to the NFL
yeah, i remember the days when motorolas were the thing in cell phones. But i've had two since i got my first cell (c332 and v3m), both had HORRIBLE battery life. like 20 minutes talk time in some cases
LOL at the picture!
It's a shame they're exiting the handset market. After all, they were the first people to make a mobile phone call (and called their rivals landline to prove it!). You could say they are the grandaddies.
However, I didn't like their phones much, so can't say I'm too sorry to see them go...
I agree with Alex too, "enterprise and government company" doing what?
Just about every police officer or fire fighter is carrying a Motorola walkie-talkie. And Motorola just bought Symbol last year, so all those laser scanners the FedEx guy uses are now Motorola products too. From their Q4 report last week, their goverment and enterprise group is like the best money maker they have
Just a rumor
Buy! Buy! Buy! I say, those Capitalist Socialist high with lead poisoning just like a bargain, expect rumors like this to jolt the stock price, I bet there are half a dozen suitors, hope it will will be a Lenovo IBM match-up, then Acer TI disaster.
Just a question? What the hell MOT does these days, since its heyday of Walkie Talkie, Satellite Phones, Semiconductors, test equipments... Even being an enterprise company is a uphill climb with serious competition.
It dosnt make much sense since they exceeded HTC and are neck and neck with samsung on MS phones in the US. (info from newswire)
Motorola does lots of R&D, so it isn't like they will be bored if they leave the cell business. Maybe Lenovo should pick that up as well :)
The US is barely 15% of the global phone market. Doing good in the US doesn't mean you're doing well overall
You lose.
They are only ahead of HTC on non-touchscreen WM phones, this does not include non phone PDA, or touchscreen smartphones, which HTC makes roughly 50% of worldwide.
The non-touchscreen market is peanuts.
Your not serious right? When your talking about global dominance there isnt anything else than Nokia(40% of all phones sold last year where Nokia's). When your talking about smartphone dominance Nokia has 72% market share of all sold last year. Nokia havent had TS phones since 2003-2005 thought of course the s60 ts is coming this year.
Nokia has eated most of the Motos revenues and in smaller scale so have Samsung.
Moto is settled in NA and tries to scope with their 2005 desing, crappy OS and low features.
To be global player agen it really needs new Razr like device and currently i dont think they can do it.
Doze, nobody mentioned Nokia, we're specifically talking WM touchscreen and non-touchscreen phones.
HTC are still the #1 manufacturer for WM touchscreen, and #2 for non-touchscreen.
Porcoddddddio, cazzo dite?! Ma ammazzatevi! W motorola.
they need to start making more phones with the new Linux-java platform. Motorola has the design thing down, and as long as they can leverage their new platform i can see them going back to the top.
The whole Linux-Java thing is the reason for Motorola to fail so miserably compared to real PDA phones. Yes, it started using it much earlier than Google, and it also failed already.
I love these "analysts", they really know what they're talking about.
Exit the handset business? No. Spin it off, ala Ericsson? Possibly.
I know, it's hilarious. I'd love to get paid for making outlandish statements.
Spin it off like Ericsson? More like spin it off like Sony! Sony-Ericsson is a joint venture because *Sony* was not profitable in the cellphone markets. Especially in Europe. Ericsson on the other hand is a huge player worldwide from phones to networks (#1 globally). Sony is the stronger worldwide brand so they used it. However the research and technology is mainly Swedish.
If you're from the US you might not know that Ericsson is one of the larger players in the massive European, EMEA and Asian markets. Remember the US cellphone market is weird (and small) compared with the rest of the world.
also a joint venture because ericisson lost all its plants..
Sad. I am a big fan of moto, but damn, they have had their chance. Its not like they don't have the resources to compete. Even before the iPhone there were tons of opportunities to fast track great handsets direct to consumers, instead of kissing the evil telcos collective asses.
I have been participating in the whole Open Moko thing, and I encourage you all to do the same, plus with android on the horizon, maybe we can get back to the good old days of hacking handsets like we used to with BREW mots.
Again?! It seems that Moto will announce quitting the biz every few years, only to still stick around and make crappy phones. Last time (a couple of years ago or so) didn't they announce that they would quit the marketing and concentrate on phone OEM and component manufacture? Sounds like an attention-seeking teen that threatens to kill himself every other day just to make an impression.
First, they screw up their PowerPC business and, now, they're screwing up their handset business. Can't they do anything right?
I don't know what you all talking about. I have their v3xx phone which is great. It looks exactly like the first RAZR, but in fact it's 3.5 gen phone, with 3 days between re-charges (without BlueTooth on, 2 days with). It has great UI, 2 cameras, built in MP3 player and much more.
I glad I bought it, worth every cent.
Agreed. I *love* my v3xx. The only way it's comparable to the RAZR is form factor, which I still love anyway.
They do a lot more then selling cell phones? Hmmm let me see.. they sold off all the semiconductor groups, now On and Freescale.. they sold off the Government electronics group.. now General Dynamics.. they sold off the Embedded Computer group.. now Emerson Network Power... they dumped Quasar TVs, the radios and other consumer electronics a long time ago.. What's left? Cell Phones is the last remaining big ticket.. I don't think they're making enough on cable boxes and cable modems to survive for long. They've come a long way since the Motorola radio transmitted the first words uttered from the moon.. bummer is it's been the wrong direction.
Crapola. I just bought a Motorola Q9c and a boat-load of accessories.
Once Nextel is gone (Sprint had to keep Nextel for five years, in order to avoid nullifying the contracts it had with retailers), IDEN will be gone, too.
Motorola is the exclusive producer of IDEN phones. (IDEN/CDMA/GSM... the three main channel access methods)
I find it hard to believe they aren't selling enough Q's (awful, awful phones) or RAZR's (up until the last two generations, while attractive, they are also very cheap and poorly made)... We wouldn't be losing anything if they went, but I don't they'd go without a last ditch effort.
To exit after all these years seems like the cheap way out. They need to do some market research and find out what's going wrong, Hire some new talent then fight back. If their UI is the major problem then wipe the slate clean and start again.
Moto has a VERY lucrative Public Safety Communications Business. They own 85% Market Share of that business. Cell Phone handset business is like the TV business. Very Low Margins. ANd very competitive. I mean APPLE revolutionized the phone, and their stock is down some 35% since reporting earnings of its first full quarter on sale. You do what you gotta do Moto!
Both their hardware and software has been total shit from since I have ever known them.
I hope and dont belive that Moto is leaving. It would be -1 from the big 4(Nokia 40%, Samsung 14%, Moto 12% and SE 9%)and what we consumers want is competition.
A cellphone with a bad UI? Blasphemy!
I think they would do everybody a favor! I got my last Motorola cellphone in 2000 and I never wanted more!! The menus were the most useless I've seen, problems with the signal, even it used to dial numbers in my pocket. It was the most awkward cell phone I've ever had. I heard they improved but apparently not enough.
It's been a long, hard fall, indeed! Motorola has been nothing but tales of delayed product launches, broken hardware and ridiculously slow software. The phones that had potential to be true innovators (remember the V600?) either took years to launch or suffered from a monumental lack of creativity (RAZR2? What kind of stupid name is that?) that in the end, leads to returned handsets, falling sales and failed expectations. So long, former king of the airwaves... And I hate to say it, but good riddance.
For those of us concerned about the larger questions in the US - technology companies that aren't US based - this is a really bad thing.
Once we start to exit the market (IBM w/ PCs, Motorola rumor) we won't have the one thing we used to have: R&D and US based companies (even if most the work was done somewhere else).
Not just bad for the US but global marketplace. We're hogs, but but we've been keeping a global economy going for some time now. A shift will hurt everyone in the short (& possibly long) term.
You forget that Motorola is a worldwide leader in network devices (Wimax and Wifi), communications equipment (CB Radios), and with their recent aquisition of Symbol technologies, also the worldwide leader in barcode scanners and mobile computers (which have ridiculous margins). Half of Motorolas Q4 profits came from the Symbol aquisition alone.
And while getting out of the cell phone market (where margins are nothing) would be a good idea - it isn't going to happen. Not anytime soon at least, much to many a iphone fanboys demise.
It would be stupid to stop in really fast growing business Nokia had alone $22.9 billion revenues from last year.
Although they definitely don't make the best phones in the world, I could not see them getting out of the business entirely. There phones with the radio function are almost a necessity in the richer parts of Mexico, maybe they will exit some developed markets but there is opportunity for them in developing countries.
I'd make a Sega reference here, but that would imply I thought Motos were top-notch, honorable phones.
You guys, they invented the cell phone right? Why leave when they made their business? LOL The picture
While the RAZR was stylish, it was not a great phone. I could never read my screen outdoors because of all the dust that got under the screen (screen seals failed to keep out dust.) Moto has one of the worst phone number/contacts organization methods I've ever seen on the phone UI. Why do I need to scroll past multiple phone numbers for the same person to get to the next person on my phonelist!!! Why can't numbers be grouped by person with a preferred default contact number for that person like on a Nokia or Samsung! Lame!
I don't believe that. Motorola isn't just going to drop the handset business. That's bull****
It IS the software, stupid. You can't have sleek and sexy Moto phone that are absolute garbage once you turn them on and try to navigate them.
It's the same thing when all the carriers are carrying "touchscreen" phones. Interaction is super sluggish and no multi touch!
How much time and attention went into the iPhone's software? It's like day and night compared to Moto's phones.
Motorola always goes from boom to bust with their phones. Between the successes of MicroTac, StartTac, and Razr, there have always been problem years. They can't seem to keep the momentum going after one successful product.
I agree, Moto should go to Linux, that runs a open Android, with a all screen platform with no moving parts and the biggest and fastest processor they can jam in, make it unlocked and be a world phone with all the Wi-Fi connectivity that we will need in the future, when hot spots are more than just spots.
Oh... I guess that would be a iPhone the way it should have been.
:)
I cant agree... Moto have released a great phone... The RAZR2, E8, U9 has a large 500mhz processor that will definitely wipe their competitors... Also the Z6 with 624mhz, that almost twice bigger than the competitors... The lack is the UI that not much optimized, but we can hack it...
The ROKR E2 is the best phones i ever use, especially when i can optimize it myself...
I dont believe Motorola will leave handset markets... They still leader in technology and inovation, the E398, RAZR, ROKR, even the latest E8 have prooved it! The first thinnest phone, music phones with 3,5mm jack, the new and new design... The worse thing is they always late, even if their announce the inovation first, the competitors will launch the copy first... :( They wont leave, they still the best...
Bring back the StarTac. That will turn things around.
Motorola needs to restructure its management system from top to bottom if it really wants to turn itself around.
True. Our problem is the management and strategy - not only business and product, but also technology and platform.
We have so-called Motorola Fellows, who flip-flopped our software and platform strategies 3 times in past 5 years - quit Symbian, pick up Java, then Linux. All were screwed up. Big jokes.
They may have great platform architecture, excellent diagram, fancy powerpoint slides, and soundable scientific theory (to those non-technical). There is only one problem - the Java and the Linux platform his team built just did not work. Too slow, and too many "panic". Their justification is "we don't have the requirement of not being panic".
The UI framework Faultline is also full of scientific theory, has all paper benefits but not working - performance is too slow.
Eric is expecting Motorola to have Linux-based handsets soon - but just to be patient for another 5 years for the bet of Moores Law, and may be never.
If those VPs and Fellows are still holding the key positions of business and technology decision - Motorola's handset business is hopeless.
Hello Moto?