An Analysis of Motorola's Market Failure: Business Decision Analytics

This report provides a comprehensive analysis of Motorola's decline in the mobile phone industry. It examines the company's history, from its pioneering role in mobile technology to its eventual loss of market share. The report explores the competitive landscape, including the rise of Nokia, Apple, and Samsung, and analyzes Motorola's strategic decisions, such as the Razr phone and its attempts to re-enter the market with Android-based smartphones. It also investigates the impact of technological advancements, like the introduction of the iPhone and the shift towards smartphones, on Motorola's business performance. The report concludes by addressing the reasons behind Motorola's downfall, including its inability to adapt to changing consumer preferences and competitive pressures, and discusses its current market position and potential strategies for improvement. The study incorporates research questions focusing on the causes of Motorola's decline, its current market standing, and strategies for enhancing its business performance within a highly competitive environment, drawing on various academic sources to support its findings.

Running head: BUSINESS DECISION ANALYTICS
Business Decision Analytics
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1BUSINESS DECISION ANALYTICS
Research topic: Why did Motorola lose the phone market?
Organizational context and background
Motorola Inc. is one of the oldest American multinational companies operating in the
telecommunications industry. The company was established in 1928 in Schaumburg, Illinois. It
lost around $4.3 billion within 2007 and 2009, and to recover from the loss, Motorola Inc. was
divided into two independent public companies, Motorola Solutions and Motorola Mobility. The
section Motorola Mobility was sold to Google in 2012 and it was further acquired by Lenovo in
2014 (Encyclopedia Britannica, 2019). Motorola was the first company to launch mobile phones
in the world market yet over the years in a strong competitive mobile market, Motorola lost its
grip. The portable wireless telephone handset of Motorola was a pioneer in the world of cellular
telephones, in which the first model, DynaTAC 8000X, was launched in 1983. The flip phone,
Razr was the first cellular foldable handset was launched by Motorola in 2004. The major
competitor of Motorola was Nokia in the mobile phone industry. Nokia knocked off Motorola
from the position of largest cellular phone manufacturer in the world in 1998 (Linge, 2016).
However, both these companies lost their market share while competing with the smartphone
manufacturers like Apple, Samsung, HTC, Huawei, Xiomi etc. (Lamberg et al., 2019). Motorola
tried to recover its position in the market by selling itself to Google first and then to Lenovo, but
the attempt still failed.
Research problem
The problem issue that this study aims to explore is the reasons for which Motorola,
despite being the pioneer in the portable cellular mobile handset manufacturing, failed to
maintain its position in the mobile phone manufacturing industry.

2BUSINESS DECISION ANALYTICS
With the advancement of technology in the wireless mobile and smartphone
manufacturing, the telecommunication industry, the world has been experiencing a revolution in
the past decade. In a very short expansion of time, the mobile phone industry across the world
has experienced a very rapid growth (Fenner, 2019). When Motorola first brought the portable
handsets back in early 2000s, the handsets did not have the facilities to use internet. The first
smartphone, i-Phone was launched by Apple in 2007, which introduced the concept of mobile
internet with operating software and app based technology and the downfall of Motorola started.
It tried to recapture its market share by producing smartphones with Google’s open OS
technology, Android 2.0 in 2009 and its sales increased, which led Google to purchase Motorola
(Chiu, Chung & Yang, 2016). It started to produce its own mobile sets, the Nexus with Android
OS, which captured a substantial share in the market. However, as the other competitors in the
market continued to launch new versions and new product ranges, Motorola Mobility was able to
capture only 1% share of the global cellular market. The continued fall in market share led
Google to sell off Motorola Mobility to Lenovo in 2014 (Giachetti, 2018). Hence, Motorola has
been experiencing a continuous downfall in its mobile manufacturing business in the past
decade.
Research questions
1. What are the reasons that led to the downfall of Motorola in the mobile manufacturing
industry across the world?
2. What is the current market position of Motorola in comparison to its competitors?
3. How can Motorola improve its business performance in an intensely competitive market?

3BUSINESS DECISION ANALYTICS
References
Chiu, J., Chung, H., & Yang, Y. N. (2016). The impact of a conglomerate merger on its vendors
and rivals–a case study of Google's acquisition of Motorola. Technology Analysis &
Strategic Management, 28(2), 176-189. DOI:
https://doi.org/10.1080/09537325.2015.1093105
Encyclopedia Britannica. (2019). Motorola, Inc. | American company. Retrieved 29 July 2019,
from https://www.britannica.com/topic/Motorola-Inc
Fenner, R. (2019). How Global Smartphone Sales Growth Ground to a Halt. Retrieved 29 July
2019, from https://www.bloomberg.com/news/articles/2018-08-13/how-global-
smartphone-sales-growth-ground-to-a-halt-quicktake
Giachetti, C. (2018). Explaining Apple’s iPhone Success in the Mobile Phone Industry: The
Creation of a New Market Space. In Smartphone Start-ups (pp. 9-48). Palgrave
Macmillan, Cham. DOI: https://doi.org/10.1007/978-3-319-67973-0_2
Lamberg, J. A., Lubinaitė, S., Ojala, J., & Tikkanen, H. (2019). The curse of agility: The Nokia
Corporation and the loss of market dominance in mobile phones, 2003–2013. Business
History, 1-47. DOI: https://doi.org/10.1080/00076791.2019.1593964
Linge, N. (2016). Motorola brought us the mobile phone, but ended up merged out of existence.
Retrieved 29 July 2019, from http://theconversation.com/motorola-brought-us-the-
mobile-phone-but-ended-up-merged-out-of-existence-33967