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Motorola Is At The Top Of The Bottom

In the race to provide ultra low cost handsets to emerging markets, Motorola has shouldered aside the competition for an early lead. Nokia is gaining ground, though. What spoils go to the victor?

Do you remember what your first cell phone was? I remember mine. It was a Motorola. So was my second. Why? Because I enjoyed my first Motorola so much, I figured I would enjoy another. That would be the brand loyalty equation having its effect on my purchasing habits back in the late '90s.

So it is that cell phone manufacturers are rushing to fill the need for low-cost handsets in new and emerging markets across the world, where cell phones are still relatively new technology. Gaining early footing in the brand loyalty equation is a key first step to convincing people to upgrade to more expensive models down the line.

Motorola has flooded regions in Asia, Africa, and the Middle East with basic, no-nonsense handsets that cost next to nothing. According to ABI Research's latest report, these ultra low cost handsets are anything that falls under the $50 mark.

"Motorola has the strongest patent portfolio in GSM technology and got a head start in the ULCH market," said industry analyst Shailendra Pandey. "Having won the tenders for the GSM Association's Emerging Markets Handset initiative, Motorola provided 12 million ULCHs to emerging markets."

Pandey is quick to point out that Motorola's recent handset weaknesses will catch up to them. "It will be difficult for [Motorola] to maintain a leading position in the low-margin ULCH market for long. Nokia, on the other hand, will benefit from the fact that it holds a much higher share of emerging markets and also has better and more well-established distribution networks."

Samsung and LG tied for third place behind Nokia. Given that Nokia, Samsung, Motorola, and LG are four of the world's largest providers of handsets, these rankings aren't terribly surprising.

Despite Motorola's problems, holding onto the top spot in emerging markets is something for it to take advantage of.

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