Will Fewer Phones Work For Motorola? - InformationWeek

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8/14/2012
01:59 PM
Eric Zeman
Eric Zeman
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Will Fewer Phones Work For Motorola?

As part of its turn-around strategy, Google subsidiary Motorola will make fewer phones of higher quality. This strategy hasn't exactly panned out for some of Motorola's competitors.

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Google this week began making its first major changes to its Motorola subsidiary, which it acquired in May. Among the changes, Google plans to lay off about 20% of its employees, close one-third of its offices, and focus on bringing fewer devices to market.

This isn't the first time a smartphone maker has attempted to reverse its sagging fortunes by ratcheting back product introductions. Several of Motorola's competitors have made similar strategic changes, with mixed results.

HTC announced in late 2011 that it had over-reached with too many new phones that year. It's true. The company was delivering sequel devices to phones that had barely been in the market for eight or nine months. This year, HTC has brought just four phones to the U.S: the One X, One S, One V, and Droid Incredible LTE 4G.

Despite the glowing reviews most of these devices received, HTC has yet to make any headway in its turnaround. Worse, HTC said that entry-level devices were "bad for its brand." Meanwhile, Samsung has eaten HTC alive in emerging markets where low-cost phones are king. Perhaps it is too early to condemn HTC's "fewer is better" strategy, but so far the story doesn't appear to be headed toward a happy ending.

Nokia, too, has decided that a "less is more" approach is a good plan. Rather than fire off a dozen new smartphones this year, it has announced just two: The Lumia 900 and Lumia 610. Nokia is looking to Windows Phone to turn its smartphone strategy around, so the change in platforms is also playing a role. Either way, Nokia's turn-around efforts have stalled a bit.

Motorola has typically launched more than a dozen new phones each year, but the company has been fairly quiet since Google announced plans to buy it. It announced the Droid RAZR and Droid RAZR MAXX for Verizon Wireless in late 2011, and so far this year has introduced the Atrix HD LTE and the Photon Q 4G, both of which were clearly in the works long before the Google acquisition was announced.

Historically, Motorola has maintained a diverse product portfolio, with low-cost devices spread across wireless network operators around the globe. As with HTC, it has ceded the low-cost smartphone market to Samsung. I'm not sure this has been a wise move for either company.

Motorola believes that focusing on fewer products will it deliver higher-quality devices to the market. This might be true, but they have to be very, very good devices. Motorola's phones have spanned the gamut from terrible to incredible over the last couple of years. It really needs more to land in the "incredible" category.

The one exception to the less-is-more strategy, of course, is Apple and its iPhone. Apple offers just one phone per year, and has been wildly successful with this model.

Can Motorola duplicate Apple's success? Doubtful, but it appears to be primed to give it a try.

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Andrew Hornback
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Andrew Hornback,
User Rank: Apprentice
8/16/2012 | 12:51:36 AM
re: Will Fewer Phones Work For Motorola?
The fewer phones strategy may work for Motorola. The ability to concentrate on getting very good devices to market, fewer overall parts to keep track of in their supply chain, and to some degree, a feeling of exclusivity for when they really get a good device to market could really boost them.

For GM (hah - Google Motorola) to produce the next iPhone, they would need to cultivate a population of followers that seek out their devices when they need a new one.

One area where GM could really beat Samsung is keeping their existing base of phones updated (or updateable). Samsung's lack of providing timely upgrades for their installed base could be something that GM really exploits.

Andrew Hornback
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