Motorola drops to third in cellphones; upbeat on holiday sales
CHICAGO, Dec 01, 2004 (The Canadian Press via COMTEX) -- Five years after losing the lead in world cellphone sales to Nokia Corp., Motorola Inc. slipped to No. 3 behind Samsung Electronics Co. in third-quarter data released Wednesday by research firm Gartner Inc.
The new figures reflect a near dead-heat for the runner-up spot, with Samsung holding 13.8 per cent of the global handset market to 13.4 per cent for Motorola. The full-year rankings remain up for grabs.
But Motorola's decline in market share underscores how important it is for the Schaumburg, Ill.-based company to score big in the all-important holiday selling season if it wants to regain credibility lost with consumers through years of product missteps and flawed strategy.
According to the Gartner data, runaway leader Nokia boosted its market share by more than a percentage point from the second quarter to 30.9 per cent as it benefited from price cuts on its new models.
Motorola's share was down 1.3 per cent from a year earlier as it focused on more expensive phones with bigger profit potential. But the Gartner report said the company's portfolio of newly introduced products "puts it in a good position to fight back for second position in the fourth quarter."
First-year CEO Ed Zander portrays Motorola as still in comeback mode, gaining in profitability if not in mobile phone market share. But he told analysts the company feels good about its chances of picking up more market share this quarter with the array of 20 new phones it shipped this quarter.
"We're a healthier, stronger, more profitable company" than a year ago, Zander said at a conference in Scottsdale, Ariz. And, without giving numbers, he hinted at early success for the company's new $500 US Razr phone: "We've got the hottest product, I think, on the planet right now in the handset business."
Wall Street also appears optimistic about Motorola's prospects, particularly since the company appears to have avoided a repeat of last year's holiday mixup when it failed to get some key camera phones to shelves by Christmas. Shares rose 49 cents, or 2.5 per cent, to close at $19.75 on the New York Stock Exchange and have gained more than 20 per cent since early November.
"Even if they're No. 3 but they have very solid, profitable growth, that would be fine with us," said Kenneth Leon, an analyst for Standard and Poor's. "The management is much more focused on profitable growth than seeking sales just for market share."
Leon anticipates Motorola picking up market share from Samsung with increased sales over the holidays.
Analyst Kevin Dede also sees signs the company is about to turn the tide somewhat.
"The trend's been against Motorola for a long time, and the competition's super-tough," said Dede, of Merriman Curhan Ford and Co. "But I think they've got their act together for developing functional product that's easier to use. ... With consumer electronics, part of it is buzz. And I think Motorola's starting to get the buzz back."
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