Motorola Cant Meet Demand For RAZR Handsets

Speaking at a recent Merrill Lynch conference, Ron Garriques, President of Mobile Devices Division at Motorola, noted that the company is still having trouble meeting demand for their iconic RAZR handset.

Garriques said that he expects sales of the RAZR handset to continue to grow in most territories, driven in part by new colors and the launch of a Vodafone Live branded handset in 2H. From a technology perspective, RAZR is expected to evolve over time to HSDPA, and perhaps TD-SCDMA, which should create a replacement cycle. Lastly, the RAZR appears to be giving MOT a "halo" effect that the company believes could positively impact Motorola?s ability to sell mainstream, midrange products.

Motorola is also very positive about the emerging markets, especially due to their contract with the GSM Association to provide low-cost handsets in those areas.

According to management at the Merrill Lynch conference, a situation where one vendor holds 70-80% in certain emerging markets (e.g. Nokia's share in India) is not sustainable since the No. 1,2, and 3 players typically command 35-40%, 20-25%, and 10-15% share, respectively, in any given market.

Long term, Motorola believes that incremental share gains are possible in Europe as the company is ramping new products, and where it believes its market share as the #2 player is not fully saturated.

Merrill Lynch concluded in a research note that they feel Motorola management sounded confident with its ability to grow the business, at least in the near-term, based on continued momentum with the RAZR phone and the introduction of new "cool" handsets."

Posted to the site on 3rd March 2006