In a fast-changing and fiercely competitive market like mobile handsets, sitting still is not an option. But, as last night’s catastrophic trading update from Motorola shows, it has done just that.
While rivals have moved to sate consumers’ appetites — such as Sony Ericsson with its new Walkman models — Motorola, the world’s second-largest handset maker, has relied too heavily on the once hugely successful Razr.
Supporters of the Chicago-based behemoth pin its latest profit warning on an industry-wide slowdown. But that is off the mark.
The underlying mobile market remains strong — the number of handsets sold globally last year was 10 to 15 per cent higher than forecast late in 2005. And those buoyant conditions appear to have persisted. Sony Ericsson today reported a 54 per cent rise in net profit. It also said that it expects to keep winning market share in 2007.
Earlier this year, Ed Zander, Motorola’s chief executive, fought off pressure from Carl Icahn, the billionaire investor and corporate raider. How long he will able to keep doing so is open to question.