Motorola Analysis
Motorola AnalysisThere are numerous cellular service providers in the United States. With the recent boom in sales in the consumer market it is important that Motorola clearly define it’s current market segments and identify any we have over looked. Because of the fierce competition, it is also very critical that we explore the needs and wants of the potential cellular customer.
Right now, the Motorola Company sees everyone as a potential customer. Going wireless has not only become the latest and greatest fad, but very critical for business. Within the cellular market exist two broad segments, the consumer segment, and the business segment. Both of these groups have different expectations of the kind of service and value they expect from their cellular providers.
The first segment, the consumer segment, consists of what I will call the “recreational” users. The consumer segment counts for less than 30 percent of the total cellular market (Gupta). These customers do not depend on their cell phones for business purposes. They are typically teenagers, college students, car phones, and members of families who are often on the go and need to be able to get in touch with family and friends on occasion. Their air time usage is usually must lower than the members of the business segment. The typical user is focused on certain aspects of their cellular providers: “How much does it cost? Do I really need these great new wonderful things that technology is offering? How often must I replace or recharge the batteries? Can I use this only in my town?” Most technology-related studies indicate that consumers have relatively little interest in anything other than if the product works when they want it to work.(Quinn) “They are not predisposed to debate the relative merits of competing standards. They aren’t concerned with whether their cellular service is terrestrial or satellite-based (Globaltelec).” As the industry matures effective customer segmentation and development of customized products will be critical success factors.
Motorola has caught the eye of the younger consumer segment with a product called TalkAbout, which comes in an icy blue to attract younger consumers who might be new to cellular services but yield to a sporty image. This product combines both paging and cellular phone services at one low price.
The second major segment is the business segment. Today, small businesses and corporate segments account for about 70 percent of world cellular market (Gupta). These users of cellular services are more concerned with the features the phone has to offer. Motorola’s unique phone/two-way radio combo is a key competitive tool in the business niche. “We feel we’re the only player that really offers something new and different (Motorola)”. This product has appeal to many different types of companies. Where I work as a security guard, this product took the place of our old clunky two way radios. This product offers better range, clearer signals, and no interference with other communication devices. Many construction companies have also switched to this device simply because it combines cellular and radio communications into one product.
Advertising has also helped Motorola propel sales of its handsets. They recently won the most unforgettable ad of 1999: Motorola, “Blackbird”, which helped gain national attention to its yellow-and-black i700 iDEN phone and its target audience of businesspeople.(Vargo)
Another new market that is emerging is the wireless Internet market. “Motorola is putting Wireless Application Protocol browsers in all its major product lines; over the course of next year, the browsers enabling Internet access will be in virtually every new phone, from the low end to the high end (Alleven)”. This market is in rapid demand from both the consumer and business markets. Wireless Internet will be the next big thing for communication technology and the customers will likely purchase handsets that have this capability.
The company faces fierce competition from Nokia, which has managed to build ergonomically stylish handsets that consumers crave. “New competitors from Japan, with know-how in small consumer electronics products and software, could enter the U.S. race for handsets, and new wireless data devices threaten to take away market share as well (Alleven).”
Motorola’s best opportunities lie in the growth of wireless Internet handsets. If they can produce an easy to use phone, with an optimal sized viewing screen, they have a chance at making big profits. I feel this is where Motorola should focus most of its attention. They have already teamed up with Cisco Systems to help with the more advanced development of this product. A possible alliance with a major email provider, such as Yahoo, may also be called for. Motorola would then be able to offer a service for consumers to have the ability to check their existing e-mail accounts from their handsets. The alliance would prevent Motorola from having to develop its own email servers and give them a more reputable E-business to be associated with.