Motorola crashes and burns, now falls from 6th to 8th biggest phone maker - behind RIM and Apple

The fall from grace for Motorola could not be more dramatic. And typical to how Wall Street takes in these facts haha, as Moto crashed, its share price soared. I am very happy I am not in the financial analysis racket haha.

We warned Moto here, that they had a good option to save the failing company. Of course they did not listen to us. We also warned that their smartphone strategy could not save them. Now we hear the bell and it tolls for thee, Motorola.

A bit of context. At the end of 2006, just over 3 years ago, Motorola was the world's second largest mobile phone handset maker, with 21% market share, selling over 50 million handsets per quarter. Then the crash started. They dropped 16% sales for 2007, as the overall handset market grew 19% Motorola averaged 40 million handsets per quarter. In 2008 the same pattern. Handset sales fell 34% while the industry grew 9% and entered the economic recession. Motorola averaged selling 30 million handsets per quarter. Then came deadly 2009, Moto lost half its customers, crashed and burned, and averaged selling 15 million phones per quarter. Moto's market share fell every consecutive quarter almost in linear patter from 21% to 3.4% by Christmas quarter of 2009.

And in this devastating decline, Motorola started to report losses. Its losses mounted and now the company has announced it will split into two. Yes, this Q1 Motorola finally reported a small profit, this after demoralizingly deep repeated staff cuts, but where was the profit? Not in the handsets division! Even as Motorola's phone business declined, it also continued to make losses in its phone business.

How bad is bad? Motorola reported total sales of 8.5 million handsets for Q1, a decline of 29% in just one quarter from the Christmas period. Compared to last year, they have again lost nearly half of their customers in just one year.

So last quarter Motorola fell out of the Top 5 handset makers (Chinese ZTE passed both Motorola and SonyEricsson even for fourth biggest handset maker globally). Where is Motorola now? It fell further behind in the pack. It has now been passed by RIM - yes, the smartphones-only Blackberry maker from Canada now makes more mobile phones than Motorola who makes both smartphone and the much cheaper dumbphones. Congratulations RIM ! You are now the biggest handset maker of North America.

And was that all? Noooo.. Then there is Apple. Apple sold 8.75 million iPhones this Q1. So Apple has also passed Motorola as a mobile phone maker! The biggest handset maker in the USA is no longer Motorola, it is now Apple. Apple achieved this amazing milestone in less than 3 years. Awesome, congratulations Apple!

Motorola has fallen to 8th biggest handset maker in the world. Their market share is 2.8%. A year ago they were 5th biggest, two years ago 3rd biggest and 3 years ago 2nd biggest in the world (and 12 years ago Motorola was biggest handset maker)

What of smartphones? That was the big clever strategy for Motorola. I wrote on this blog that smartphones alone cannot save Motorola. So how did its smartphones strategy go? Motorola sold 2.3 million smartphones. That is not even good enough for 5th place among smartphones.

So, pat on the back for Tomi who did forecast last summer that this year, RIM would pass Motorola in total handset production. What I could not foresee was that Moto would fail so badly that it would even fall behind Apple. I wish I had had the vision to make that call haha..  Still, not bad call from last summer on RIM, eh?

But its a brutal place, this mobile phone business. Just this month we've seen giant global companies enter the phone-making racket: HP, Microsoft, Vodafone; joining other recent new phone makers like Dell, Lenovo, Acer etc. They would do well to consider the fate of Motorola.

Just three years ago one out of every 5 mobile phones sold on the planet had a Motorola logo and they 400,000 handsets every day. Now only one out of every 35 handsets sold worldwide says Hello Moto, their market share is 2.8% and they manufacture only 70,000 new phones per day. Sad day for Motorola. When will the bleeding end? At least SonyEricsson climbed out of loss-making and generated a little profit when it lost market share this past quarter.

Comments

[Non-Moto-fanboi]

Yes, but they sold 2,3 million devices... up from 2 mill in Q4/09, right? So they are selling what, 15% more?
I think they are letting go all non-smartphones and focusing on building marketshare from smarthones only.

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[devlet hastanesi randevu]

They're certainly contenders in the smartphone space, but this is a winner-

[2. el eşya]

but where was the profit? Not in the handsets division! Even as Motorola's phone business declined, it also continued to make losses in its phone business.

[devlet hastaneleri]

HP, Microsoft, Vodafone; joining other recent new phone makers like Dell, Lenovo, Acer etc. They would do well to consider the

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Ten thousand updates to Twitter. Over two years thats 14 every day. But those who follow me know that some days I do nothing, but other days its

[banka rehberi]

yes, the smartphones-only Blackberry maker from Canada now makes more mobile phones than Motorola who makes both smartphone and the much cheaper dumbphones. Congratulations RIM ! You are now the biggest handset maker of North

[kimya]

Canada now makes more mobile phones than Motorola who makes both smartphone and the much cheaper dumbphones. Congratulations

[devlet vergisi]

as Moto crashed, its share price soared. I am very happy I am not in the financial analysis racket

[office chairs]

Motorola averaged selling 30 million handsets per quarter. Then came deadly 2009, Moto lost half its customers, crashed and burned, and average

[evden eve nakliyat]

From the Earnings Call we get a few interesting tidbits. We learned that 66% of all revenues came from the USA ie 1.05 Billion dollars. We

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Microsoft; and still others have, such as SonyEricsson last week and expected also to be similar for Motorola.

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[aluminyum]

I have been very open about my disagreement with Motorola's recent direction and blogged here for example with an open letter count several other handset

[aluminyum]

blogged here for example with an open letter to how they should have gone. I also count several other handset