Yesterday, Motorola announced a restructuring that would see its mobile handset business isolated from the rest of the group. Most commentators see this as the end of the road for the mobile division; doomed to be sold off.
This is very sad as Motorola is not only a pioneer in electronic innovation, but in effect created the mobile phone industry 25 years ago. It was the leading handset maker through the 1990s, loosing this position to Nokia in 1997.
This failure to recognize the handset as a fashion item and remain in tune with the fickle needs of the consumer could be the ultimate cause of Motorola leaving the business it started. The inability to understand and respond to customers plagued Nokia in 2004, when it was accused of arrogance and lack of design and innovation.
At the same time Nokia was struggling, Motorola had a huge success in the launch of the Razr handset, selling over 110m units and reclaiming a market share level of over 20%. However, since then Motorola has not had any significant handset launches or innovations. BusinessWeek has a great view of this failure, "The Razr was a fluke. Motorola was never an innovation-led company. It was a technology-driven company run by engineers who failed to understand the difference between technology and innovation." You can read the complete article here.
The stakes are high in this industry. The metronome of contractual upgrades beats out a rhythm demanding handset manufacturers respond to new product cycles of no more than two years. Then as part of the fashion industry, they need to understand the psychology of being 'cool'.
Here is an industry where innovation, has to be 'built in'.
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