Rhys Blakely
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Motorola will compete with the BlackBerry mobile e-mail service and design phones with social network-type services in mind, in an attempt to recover from a slump in performance, the group’s head of technology said.
Padmasree Warrior, who controls a $4 billion (£1.97 billion) research budget, highlighted the recent acquisition of Good Technology for $438 million as key to Motorola’s future.
Good Technology specialises in mobile e-mail systems and, according to analysts, could transform Motorola into a serious rival to Research in Motion (RIM), the group behind the BlackBerry. Good’s “push e-mail” technology is being rolled out in Motorola’s Q series of smartphones.
The Canada-based RIM, which is approaching the ten million user mark, is worth about $46 billion. It has passed Motorola’s $40 billion market value, despite having less than a tenth of the US group’s revenues.
Ms Warrior said that the launch this year of Apple’s iPhone had “raised consumer interest in smartphones and in mobile functions beyond voice and toward multimedia”.
She added: “We are looking at developing the next generation of social networking platforms and things like video blogging.”
Dr Richard Windsor, the Nomura analyst, said: “In terms of user experience for wireless e-mail, the Good system is right up there. Where it falls down at the moment is in [Motorola’s] devices . . . but the acquisition means Motorola is equipped to bring internet-type experiences to mobile.”
Ms Warrior said that Motorola was targeting web-based TV through its set-top box division and WiMax internet systems, as it seeks to diversify from its struggling handset business.
Motorola slumped to a $209 million first-half loss, from a $2 billion profit a year earlier, on plummeting handset shipments. Its shares have lost a third of their value since October.
In July, Ed Zander, the chief executive, faced calls to quit after he revealed that the handset division, which accounts for two thirds of revenues, would not make a profit this year. In particular, he was criticised for failing to produce a follow-up to the hit, ultra-thin Razr handset.
John Delany, the Ovum analyst, said: “They rode the Razr for too long and didn’t come up with an encore when rivals like Samsung and LG were pushing hard in the US.”
Ms Warrior said: “We have a goldmine of innovation, but have encountered execution issues.
“We misread 3G and did not have handsets in the market at the right price points. We are addressing that ... In the mass market we concentrated on form factor [handset appearance] ... now we will be feature-driven.
“Margins are always going to be a problem in the $20 handsets range.
We are not going to chase market share as we have done in the past.”
Ms Warrior also picked out Motorola’s connected home division, which makes set-top boxes, internet telephony systems and digital video networks.
The unit accounted for about 8 per cent of sales last year, but revenues increased by about 16 per cent. Motorola said this month that it had provided the technology behind BT’s on-demand internet video service.
“We see the set-top box morphing into a ‘home gateway’ system,” Ms Warrrior said. “We are looking at combining internet television with telephony, for instance, so users can make TV a social experience, even if they are not in the same location.”
Ms Warrior drew attention to Motorola’s acquisition last year of Symbol Technologies, which bolstered its presence in the market for “blue collar” wireless devices.
In addition, Motorola is behind BT’s Wireless Cities project, which aims to roll out wi-fi hotspot networks in urban centres across the country.
It is betting heavily, too, on WiMax — described by Ms Warrior as “wi-fi on steroids” — in countries including America, Pakistan and Bahrain.
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