Motorola's fortunes plunge as Razr loses must-have status

Iria · Feb 3, 2007, 02:57 PM

Source: IHT
_________
When the sleek Motorola Razr V3 cellphone first hit the stores just over two years ago, it carried the price tag of a must-have status symbol: $500.

Now? About $30 with a two-year service contract.

Motorola's fortunes have plunged along with the price of its Razr. Its profit has collapsed, and it announced plans last month to lay off 3,500 workers.

At first glance, the company's troubles are puzzling. Almost one billion mobile phones are sold worldwide each year, and Motorola has almost a quarter of the market.

Consumers are also replacing their phones faster, on average less than every two years.

But the cellphone business is still relatively young, and Motorola is learning a cruel new lesson about consumer tastes in phones. An industry that has focused more on microchips, screen size and data speed is finding that it has more in common with the fashion business.

Today, a phone's value reflects not so much what it can do, but whether it is the envy of friends and colleagues.

Feb 3, 2007, 02:57 PM	#1
Iria DriverHeaven Extreme Member Join Date: Apr 2004 Posts: 7,275 Rep Power: 76	Motorola's fortunes plunge as Razr loses must-have status Source: IHT _________ When the sleek Motorola Razr V3 cellphone first hit the stores just over two years ago, it carried the price tag of a must-have status symbol: $500. Now? About $30 with a two-year service contract. Motorola's fortunes have plunged along with the price of its Razr. Its profit has collapsed, and it announced plans last month to lay off 3,500 workers. At first glance, the company's troubles are puzzling. Almost one billion mobile phones are sold worldwide each year, and Motorola has almost a quarter of the market. Consumers are also replacing their phones faster, on average less than every two years. But the cellphone business is still relatively young, and Motorola is learning a cruel new lesson about consumer tastes in phones. An industry that has focused more on microchips, screen size and data speed is finding that it has more in common with the fashion business. Today, a phone's value reflects not so much what it can do, but whether it is the envy of friends and colleagues.