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ECommerceTimes.com

Why Can't Motorola Get Its Act Together?

By Jeff Kagan
Aug 4, 2011 5:00 AM PT

Motorola Mobility is one of the industry's more interesting stories. It is a story of rags to riches to rags, again and again. It was the leader in the wireless handset market for decades. Then it lost its way in the 1990s and has not had a long-term recovery since.

Why Can't Motorola Get Its Act Together?

Through partnerships with Google and Verizon, it seemed to be getting some traction under its feet again. Things were starting to look better at the company helmed by CEO Sanjay Jha.

However, as the industry continues to move ahead, suddenly Motorola is starting to get lost at sea again in a battle of big brand name super smartphones. When you walk into any store, you will see countless Google Android phones made by different manufacturers.

In addition, Verizon Wireless is no longer focusing just on Motorola, but rather promoting its entire line.

Is Motorola getting ready for another downturn? Why? Where is its problem? After all, the industry continues to grow. Will it ever recover?

I'll address these very interesting questions, with an eye on how they impact other previous leaders like Nokia, RIM and Palm/HP.

As my Pick of the Week, I'll tell you how WindStream is continuing its growth Wave by acquiring Paetec.

The Right Outlook

Since Motorola lost the No. 1 spot in the 1990s, it has only had two upward bursts -- one in the early 2000s with the Razr, and now another with Google Android.

Can Motorola recapture its greatness as a leader in the handset market? Sure, anyone can. After all we have witnessed two non-wireless competitors, Google and Apple, jump in, change the marketplace and continue to lead.

The big question is WILL Motorola recapture its glory days? The answer, as far as I can see today, is no.

Understand what I am saying. It's not that Motorola can't. It just don't have the right mindset. Of course, that could change at any point -- if.

The marketplace is very different from when Motorola led in the 1990s. Today it's all about big name brands and smartphones and the Internet and apps. It's all about being new and cool and amazing. About touching the customer in new ways.

Is Motorola cool? The truth is no, and that is its big problem. It was on the upside of the Wave, the growth side, through the 90s. It used to be cool. Remember in the mid 1990s, when the coolest handset was the StarTac? The marketplace has changed, and Motorola is struggling with this new space.

Just like in the movie "Austin Powers: The Spy Who Shagged Me," Motorola has lost its mojo.

It's Time to Swing, Baby

How can it get its mojo back? That is the big question and challenge Moto faces today. What is Moto? That was the re-branding effort of several years ago that seems to have faded away.

So the problem is simple. Moto has no mojo. At least not now. Not yet. This does mean it understands the problem -- just not the solution.

Here is a major homerun branding and advertising idea for the company: License Austin Powers and through your advertising and marketing, start telling the story of how Motorola lost its mojo, and how now it is battling to win it back.

Create an entire set of ads, commercials and messages. Involve the audience. Win them over. Get them on your side. Create entertainment with your messaging.

Then watch your numbers climb as Moto gets its mojo back. Be playful. This is one way to build a killer refreshed brand with a name like "Moto."

Remember, the marketplace is much different from the 1990s. So for Motorola to succeed, once again, it has to think out of the box. New rules.

Who and what are Motorola today? How is it different from its competitors? Why should customers like it and love its technology?

These emotional questions are left unanswered, and that is the problem. It's the emotional connection that is missing. People buy and don't buy based on emotions. Period.

Bring On the Sizzle

Motorola has to focus on the brand as well as the technology. The problem is it never knew how. Does it even understand the "brand magic" that has built competitors like Google, Apple, Samsung, HTC and others?

What has Motorola done differently to create excitement and buzz? It was never a marketing company. It was always a very fortunate cellphone company until it fell off the track.

What Motorola needs is to be a brand marketing company. It means thinking in a completely new way. The wireless industry is changing. Yesterday you walked into a cellphone store and bought.

Today you can also walk into a Best Buy, Radio Shack, Apple Store, grocery stores, pharmacies and tons of other retailers. Today it's a marketing game. Today it's all about the brand. The emotional connection.

Apple and Google, of course, are tech companies, but first they are marketing companies. They capture the imagination. Everyone is excited about how they are changing the industry. People love these companies.

This is the next generation of branding. Is Motorola changing the industry? Not anymore. Not for a long time.

It is not alone, however. All of yesterday's leaders are struggling with the same problem. Companies like Nokia and RIM and Palm/HP also have the same challenge.

These were never marketing companies. They didn't need to be in the 1990s and early 2000s. Today they do, however -- and because they are not, they are struggling in the fight for their lives.

As the industry changed over the last five years, they have all been left behind. They do not have a forward-looking brand. They don't understand the branding aspect of the business -- the emotional connection to the customer. Because of this, they no longer lead.

So what is the industry all about today? It's about the sizzle, not about the steak. If you can't capture customers' imagination with the sizzle, they will never taste the steak. This is the reverse of the way the market worked 10 years ago.

So these companies need to reinvigorate their brand. AT&T did after SBC acquired the failing long distance company several years ago and turned it around with completely new and different ideas and thinking.

Either transform your brand or create a new brand and build that to effectively compete with today's winners.

Of course you must have cool and cutting-edge technology. You have to lead instead of follow. You must have killer Web browsers and be easy to operate. You have to challenge and tickle and delight the customers.

That is the playground where success is found today. Even if your steak is much better, much juicier, much tastier than the others -- without the sizzle, no one will ever know.
Jeff Kagan's Pick of the Week

As my Pick of the Week, I want to tell you about WindStream acquiring Paetec and continuing its runaway growth Wave story.

WindStream is the fourth largest local phone company, and it has been growing very rapidly through acquisitions over the last few years.

It started out as Alltel, a smaller local phone company. A couple years ago, Alltel broke up into a wireless and wire line company. The wireless company kept the name "Alltel" and was acquired by Verizon Wireless.

The wireline company changed its name to "WindStream," transformed itself, and has been on a tear ever since acquiring companies right and left and growing like crazy.

It offers business and consumer telephone and Internet service, and it resells satellite television.

It still doesn't offer wireless, though. I think it is just a matter of time before it gets into the wireless business -- but it maintains that wireless is not in its future. We'll see.

This Paetec deal really beefs up WindStream's business services in more markets nationwide.

You can imagine both CEOs, Jeff Gardner of WindStream and Arunas Chesonis of Paetec, must be very happy indeed. Congratulations, guys.

As for WindStream... yes we are sitting and waiting for your next big acquisition. Who's next?


Jeff Kagan is an E-Commerce Times columnist and tech analyst following wireless, telecom, healthcare and technology. He is also an author, speaker and consultant. Email him at jeff@jeffKAGAN.com. Read the first chapters of his new book Life After Stroke, now available at Amazon.com and Barnes & Noble.


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