The Wall Street Journal yesterday published an article about cellular phone manufacturers that anticipate -- and those that miss -- capitalizing on "fads" at the right time.
Actually, the word "fads" in the article's headline is inappropriate because the Journal discusses useful features rather than passing fancies. Perhaps the person writing the headline couldn't find a word that fit within the space; that happens.
Color screens was one feature that both Nokia and Motorola missed, but Sony Ericsson, NEC, Samsung and Sharp were on target.
The camera phone market
Manufacturers that don't anticipate trends can lose lots of money trying to catch up with the leaders.
Today, camera phones are hot. Nokia is ahead but Motorola is, once again, behind the curve, the Journal reports. "[T]his time, Nokia anticipated the speed with which these phones would catch on world-wide. In 2002, it introduced a camera phone in Europe and has brought out several more.
"Camera phones in August, the latest month for which data are available, accounted for 18% of cellphone sales in Western Europe by value, according to Gfk, a consulting company based in Germany."
Motorola playing catch up
The Journal says, "Once again, Motorola was caught flat-footed on its own turf. U.S. cellphone-service providers first offered camera phones in the fall of 2002, when Sprint PCS started offering one from Sanyo. A later Sanyo model is on its way to being the best-selling handset in Sprint's history, the company says. But while Motorola has marketed several models around the world, it still hasn't offered a single one in its home market."
Motorola promised both Cingular and Verizon Wireless it would provide camera phones by the end of the summer or early in autumn. Now, Motorola says Cingular won't get the phones until December and Verizon won't get them until next year, the Journal reports.
Motorola says it underestimated the difficulty of developing camera phones.
Falling prices
One problem with being late to the market is you can't charge a premium for your latest and greatest handset if other companies have introduced similar devices and are in the process of reducing costs.
The article notes that Motorola "won't be charging top dollar for its new camera phones, however. Average wholesale prices of camera phones have already dropped 20% during the past year, according to Strategy Analytics, and are projected to drop a further 24% in 2004. Sales of phones with built-in cameras are now expected to reach 65 million units by the end of the year, or about 14% of the global cellphone market.
"Motorola's share of that market in the first half of 2003: 1.2%, according to Strategy Analytics. The leaders in the market -- NEC and Matsushita Electric Industrial Co. of Japan and Nokia -- have about 15% each."
My view
It's sad how Motorola has missed chances. The company was a king in the mobile telephone ("radiotelephone") business before cellular, the king in paging and the first to offer a portable cellular phone. I've used many of these products, including the first -- $3,500 -- portable cellular phone months before they were available. But Motorola has had a terrible time getting products out the door.
However, even though the company has been late in offering camera phones, it has other opportunities. The camera phone business in the U.S. is in the nascent stages. I believe we'll see one megapixel camera phones in this country by the end of this year or early in 2004 -- though not from Motorola. Also, there will be a market for camera phone accessories, such as those unveiled by Nokia.
Motorola certainly hasn't missed its chance in camera phones. But it's now in the position of being a "me-too" rather than a leader -- unless it introduces a ground-breaking product that raises the ante for other vendors as well as being a financial success.
"Motorola's share of that market in the first half of 2003: 1.2%, according to Strategy Analytics. The leaders in the market -- NEC and Matsushita Electric Industrial Co. of Japan and Nokia -- have about 15% each."
Posted by: boys first time | Sunday, March 28, 2004 at 07:34 AM