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Moto back in with 3 UK, but pipeline problems persist

12 марта 2008

3 UK announced Tuesday it has added Motorola's latest RAZR incarnation, the RAZR2 V9, to the range of handsets on offer to its consumers.

The newest addition to Motorola's long-running RAZR line up is HSDPA enabled, features a more powerful processor, and becomes the first handset from the U.S. vendor to be sold by 3 UK in 18 months.

"Motorola's renewed focus on powerful 3G handsets like the RAZR2 V9 means we can welcome them back into 3's growing portfolio," said Fergal Walker, director of products at 3 UK.

Still, while this is good news for both companies, particularly troubled Motorola, industry analyst firm Ovum believes the positive impacts of the deal with 3
UK are at best negligible.

"Surely we can't still be talking about [the RAZR] can we?" said Steven Hartley, senior analyst, Ovum.

"From Motorola's point of view it's good to establish new distribution channels but more immediate is the need to refresh the product portfolio," he told Total Telecom.

Indeed, Ovum contended back in July 2007 that the troubled
U.S. vendor had failed to prepare for the end of the RAZR's lifecycle, yet eight months later Moto is still relying on effectively the same design.

"The form factor when it came out was good. It's still OK now, but the industry has moved on. There are so many other designs out there," said Hartley.

Hartley added that as a result, 3
UK is unlikely to experience much benefit from adding the RAZR to its range.

"It's nice to have an extra vendor in your portfolio… but it won't have people rushing out to buy a RAZR from 3," he commented. "3 need handsets that will shake things up, and the RAZR is not going to do that."

The analyst noted that the longer it takes for Motorola to come up with a successful follow-up to the RAZR, the more it implies that its erstwhile flagship handset design was down to little more than luck.

"Nokia on the other hand is like a juggernaut – it's one model after another across all segments with them," said Hartley.

In the fourth quarter alone Nokia shipped 130 million devices compared to Motorola's 40.9 million.

Last year Samsung overtook Motorola to become the number two handset vendor in the world based on unit shipments. But Hartley believes that rather than concentrating solely on regaining its position in the market, Moto should also keep one eye on world number four, Sony Ericsson.

"Samsung are definitely trying to reinforce their position, not by actively going after Motorola, but they are looking to pull away this year," he said.

"Sony Ericsson have never chased the mass market, they've typically kept their portfolio at the high-end of the price range and protected their ASPs (average selling prices). I can't see them directly going for Motorola's ground, so a lot will depend on how aggressive Sony Ericsson are as to whether they take the number three spot this year," he added.

However, growth at any of the big handset vendors looks set to slow due to growing anxiety over a global economic downturn.

"All players are likely to take a hit as a result of a lower overall market," warned Nomura analyst Richard Windsor, commenting on chipmaker Texas Instruments' move to cut its first-quarter guidance in a research note on Tuesday.

expects estimated first quarter handset shipments at Nokia and Sony Ericsson to decline by 5%, with Motorola's falling 5.1%.

This will come as unwelcome news to Motorola CEO Greg Brown, who took direct control over the struggling mobile devices business in early February, replacing devices head Stu Reed. On Monday Reed then resigned from the company with immediate effect.

"Stamping his authority on the handset division and introducing some fresh blood might help, but the problem seems to be out of the CEO's hands, and up to the R&D and design teams to work out," said Hartley.

He said the pressure on Brown to turn the business round will have been increased by billionaire investor Carl Icahn's renewed efforts to shake up the business.

The activist shareholder in February named four board nominees he hopes will back the spin-off or sale of Motorola's handset division.

"I'm not sure how much time Icahn will give the management. From his point of view it's all about realising investor value, and if the value of Motorola's brand continues to move in the wrong direction, the more he will push for a break-up of the company," said Hartley.

Источник: Total Telecom

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