10 reasons why Motorola failed
- 10 April, 2008 08:59
Warren Buffet once said that when a manager with a great turnaround reputation encounters a company with a reputation for dysfunction, it is the company that will keep its reputation.
So it was with some sadness that I saw Motorola bow to investor Carl Icahn's demands that the company be split. Motorola Chairman Ed Zander dropped by the other day and the best thing I can say was he was still a bit shellshocked. Here is the company that invented the mobile phone -- in the fastest growing market in all of technology -- getting clobbered.
So, sports fans, pick the reason that Motorola failed. Multiple answers are allowed.
1. Motorola missed the movement to 3G. Sure, it did -- but remember its biggest customers, the US wireless carriers, didn't think they wanted 3G. So Motorola listened to its customers, when they should have been listening to its customers' customers.
2. Motorola was a stodgy Midwest company in a fast paced Silicon Valley world. There is probably some truth in this. The Razr was an aberration -- a wild success. It is hard to have a fashion business inside an industrial firm. Today Nokia is moving into graphics-rich mobile phone games while innovation from Motorola is giving you RAZR-lite retreads in puke colors. Apple understands design; Motorola doesn't. Motorola's fashion sense only rivals New England Patriots' coach Bill Belichick's.
3. Motorola got out of the right business at the wrong time. Motorola at one time owned lots of spectrum, which it traded for equity in Nextel. So it starts every year with zero sales while firms such as Qualcomm own intellectual property worth billions, and Verizon, AT&T and Sprint have millions of customers who will pay them US$500/year. Motorola turned down a chance years ago to buy both Qualcomm and/or Nokia (for US$20 million!).
4. Motorola just ran out of time. That's what every losing coach in history says. Doesn't fly. Maybe it had the wrong management but running out of time was not the problem. It did have a computer guy ( Zander) who had to learn the industry, but that could have been bridged. After all, what did Steve Jobs know about phones?
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