Why the RAZR is killing Motorola !!!
A great article from Mobile Gazette, for my readers:
It's one of the most iconic phones on the market, and something that redefined the way that consumers look at mobile phones. But the Motorola RAZR V3 has turned from a thing of beauty into something more sinister.. because the RAZR is slowly killing Motorola.
Motorola's sales are slumping and the handset division is making a significant loss. Major shareholders are unhappy and want something to be done urgently. However, it seems that the once successful RAZR has become a millstone around Motorola's neck.
Motorola RAZR V3
To understand how the RAZR became such a menace we need to go back a few years. The original RAZR V3 was launched in mid-2004 and at the time there was nothing at all like it on the market. An very striking handset to look at, the RAZR was much thinner than anything else on the market and its sleek metallic look and futuristic keypad were particularly distinctive. True.. it looked slightly odd because it was also much wider than contemporary phone, but it is easy to forget that the RAZR was a real head-turner when it came out.
At launch, this was a premium handset with a premium price tag and a healthy profit margin for Motorola. In early 2005 the original silver edition of the RAZR was joined by a very limited edition black version given to guests at the Oscars. This cemented the RAZR's reputation as a desirable and distinctive phone.
Sales of the RAZR boomed, and as it did the price inevitably started to drop.. but the increased volume made up for Motorola's loss of margin and business boomed.
There were problems though - although the RAZR looked high-tech on the outside, the handset's specification was a straight copy of the V500 series and V600 which had been around since 2003. So it wasn't a very new phone underneath, even though it was still quite competitive. However other features proved to be a disappointment, such as the pretty-but-difficult keypad and the poor user interface. The RAZR also lacked an MP3 player, expandable memory or a decent camera which became more marked as the competition evolved.. and the RAZR did not.
The RAZR succeeds.. others fail.
Already by the time the RAZR was launched, Motorola was struggling with other phones in its portfolio. The clever Windows-based Motorola MPx (pictured left) was a high-profile failure, the MPx220 was running late and was panned at launch due to poor performance, the MPx100 had been cancelled and various other phones were either incredibly late to market or were not making much of an impact. The MPx series in particular was hampered by Motorola's lack of ability to get the handsets working properly - but most observers would probably agree that they were ahead of their time.
3GSM World Congress 2005
Buoyed by the success of the RAZR, Motorola went into the 3GSM World Congress in Cannes at the beginning of 2005 with a range of different phones under its belt.
These included the 3G E1120 (pictured right), the E1060 music phone, the A1010 smartphone - significant phones because they were extremely advanced in terms of specifications. The E1120 had a QVGA screen, 3 megapixel camera, GPS, expandable memory, and MP3 player, 3D audio and Bluetooth.. and this was back in 2005. It was also an attractive phone with a style quite unlike the RAZR. The E1060 shared similar styling while the A1010 was an advanced 3G Symbian device.
All three handsets were quietly cancelled. At a stroke, Motorola lost three of the most promising phones in their range. The E1120 in particular would still be a great phone today and it certainly looks more stylish than most.
The RAZR V3x and V3i are launched
By late 2005 things were looking desperate for Motorola. The aging RAZR had been re-released in a variety of colours including black, blue and a fairly hideous pink. The Unrath & Strano edition took this to extremes. Yes, the RAZR was still selling briskly, but at very little profit to Motorola, and it had long ago lost its "exclusive" status.
In spring 2005 Motorola had announced their first RAZR clone, the V1150 which was later rebranded as the RAZR V3x (pictured left). The V3x was a fundamentally different device to the V3 - a fully featured 3G phone with expandable memory, a 2 megapixel camera, QVGA screen and video calling, it knocked the V3 into a cocked hat.
Again, Motorola hit a problem with the V3x.. at launch time the 3G market was still tiny and the V3x was substantially larger and heavier than the original RAZR. Here was a phone with features that the general public didn't yet want, and the device itself lacked the "wow" factor of the V3. Despite this, the V3x sold reasonably well in its small market niche.
By late 2005 Motorola had come out with the V3i (pictured right) - a substantially improved device with a multimedia player, better camera and expandable memory. While not as advanced as the V3x, it made the platform more competitive with the competition. The V3i sold well, often alongside the original (much cheaper) V3 in the shop.
More disasters for Motorola
Around the same time that the RAZR V3i was launched, Motorola again found itself in difficulties. Non-RAZR phones were not selling in any numbers, upcoming handsets were late and frankly uninspiring. The SLVR (a monoblock version of the RAZR) was enjoying a modest success, but Motorola really needed something else.
That something else was the disastrous Motorola ROKR E1 (pictured left). Launched in September 2005, the ROKR E1 was a warmed over E398 from 18 months previously and that was a rehash of the cancelled E390 announced in late 2003. When the ROKR came to market, most of the underlying technology was two years old. All of this was made much worse by a crippled implementation of iTunes which limited the number of songs that could be stored.
Many people assumed that the ROKR would be the "iPhone".. but it wasn't. The ROKR E1 was severely criticised in the press and proved to be immensely damaging for Motorola.
Although the significantly better ROKR E2 was announced a few months later, non-RAZR handset sales slumped and the ROKR label was badly tarnished. The ROKR E2 never even made it to most major markets. And then for the first half of 2006, Motorola basically shut down and announced no significant handsets at all, just a couple of RAZR clones including the W220 and W375.
Motorola takes stock - and goes RAZR mad
We believe that the failure of the ROKR shook Motorola very badly. At this point almost all non-RAZR projects were canned (including the very late-but-promising E1120). By the second half of 2006, Motorola had a new range of phones.. almost all of which borrowed heavily from the RAZR's design.
In short succession, Motorola came out with the RIZR Z3, RAZR MAXX (pictured right), RAZR XX, V1100, K1 and FONE F3 all of which were based on the RAZR or SLVR styling to a large extent. This first batch of Motorolas had no less than three HSDPA (3.5G) RAZRs.
Then followed the ROKR Z6, KRZR K3, MOTO Z8, SLVR L9 and a whole host of RAZR clones such as the fairly redundant W510. All of these handsets were very different, but had one thing in common.. styling. Although many of these handsets have not made it to market yet, it became immediately obvious that the market reaction was cool at best and hostile at worst.
The curse of fashion
The original RAZR was a fashion phone, perhaps the first fashion phone (also Motorola's old StarTac also vies for that honour). It could be argued that Motorola created the current fashion phone market with the original V3, and it is certainly widely considered to be a design icon.
At present there are very few handsets in Motorola's range that do not borrow from the RAZR in styling - but the problem is that the RAZR is strictly last season's fashion. While newcomers such as LG have come up with the Chocolate and Shine devices, Motorola continues to bring out RAZRs in an effort to rekindle success.
Other competitors don't compete in the same way - Sony Ericsson phones are more understated when it comes to design and don't fall into the fashion phone category, and Nokia like to design every phone to look a little different from the rest which keeps their range looking fresh.
Desperate times for Motorola.. but they make the same old mistakes
It is now getting on for the middle of 2007 and Motorola are in an awful mess. Sales have slumped and the Motorola board are under threat from angry investors. Without doubt Motorola needed to take a new direction in order to revive sales.
The simple truth that Motorola goes not understand is this - the RAZR has had its day. This particular design is no longer of interest to most customers, regardless of how clever the phones are technically. Fashion-savvy customers in mature markets are mightily bored of the overall design. When people wander into a shop they don't see the technology underneath - the first thing they see is yet another RAZR design.. at first glance not so different from the phone they have already. That's the thjng about fashion phones.
And yet Motorola's response to slumping RAZR sales is.. the RAZR2 (pictured right). From what we can tell, the RAZR2 V8 and RAZR2 V9 are two very promising phones.. but they have utterly wasted their time because all the clever new features in these handsets have been squeezed into the same tired old form factor that has been around for year.
Yes, technically savvy customers (such as Mobile Gazette readers) may be interested in the RAZR2 lineup because of features such as the clever external screen and HSDPA support, but both phones are saddled with the same old looks and nasty keypad of the original RAZR. And believe it or not, most retail customers look at looks first - and there RAZR2 looks just like a V3i with an oversized external display.
Motorola must do better
We are sometimes accused of being anti-Motorola at Mobile Gazette, but that simply isn't true. We believe that competition is good and a strong Motorola will benefit all consumers in the long run.. after 3GSM 2005 Motorola really looked like a company that could reach the number one spot. But Motorola's fixation on the RAZR design may well prove its undoing.
The elegant E1120 demonstrated the Motorola knows how to design attractive phones other than the RAZR. The capable MOTO Z8 shows that Motorola can write the clever software that's needed in a modern handset.
It is time for Motorola to take its considerable (but underused) talents and put them to good use by creating a new design icon which will finally make us all go "wow" again.
