Motorola Lags Rivals
All well and good, but analysts note that the company is a little late out of the starting blocks with these two products. With 70 percent of the European MMSC market already controlled by wireless heavyweights LM Ericsson (Nasdaq: ERICY) and Nokia Corp. (NYSE: NOK) (see Duo Flexes MMS Muscles), Motorola has a mountain to climb before it reaches equal status with its Nordic rivals.
“I can’t understand their reasoning,” says Devine Kofiloto, senior research analyst at EMC. “The European market is already sown up, and we expect Nokia and Ericsson to continue to dominate this region.” Kofiloto adds that if traditional SMS equipment vendors such as LogicaCMG (London: LOG) are unable to make much of an impact, a newcomer to the market will have even less chance of breaking Nokia and Ericsson’s stranglehold.
Meanwhile, Motorola’s CDMA2000 EV-DO solutions (cards and hardware systems) are an attempt to claw back the lead that Samsung Corp. and LG Electronics Inc. have taken in this nascent market. (1xEV-DO is a third-generation data-only upgrade to CDMA networks that cranks the data transfer rate up to a theoretical 2 Mbit/s, or 500-900 kbit/s in the real world; for more detailed definitions see A Wireless Taxonomy).
Unstrung’s Wireless Oracle report published last December -- “The ‘X’ Factor: Competitive Positioning in the CDMA Infrastructure Market” -- highlighted how the two companies have benefitted from domestic demand in Korea for this new standard. Lucent Technologies Inc. (NYSE: LU) and Nortel Networks Corp. (NYSE/Toronto: NT) have also had initial success (see Nortel Wins Indonesia EV-DO).
"Motorola looks to have lost some market share as carriers have shifted purchasing to CDMA2000 from CDMAOne networks," says Wireless Oracle author Gabriel Brown. "This doesn’t bode well for its position in CDMA EV-DO." Brown does point out, however, that while the vendor will have its work cut out as a latecomer to the market, this is by no means a certain disaster. “It’s still very early days for this technology, and Motorola will have plenty of opportunities to turn it around."
Motorola did not return calls before press time.
— Justin Springham, Senior Editor, Europe, Unstrung
Editor’s note: Neither Light Reading nor Unstrung is affiliated with Oracle Corporation
(Nor with The Kingdom of Orcal)