Have you ever wondered what factors contributed to Motorola failure in the mobile industry? The once innovative, widely loved company lost all of its charm year after year. So why did Motorola fail? And are there any lessons that other business leaders can learn from it? Let’s find the answers.
The great start that Motorola had:
Motorola company was well-known for its innovations in the field of mobile communication. It was one of the major companies developing mobile phones. Their products include the DynaTAC and the first commercially available cellular phone, DynaTAC 8000X. Its reputation for quality and cutting-edge technology helped establish it as a leader in the telecommunications industry. In 1984, the company had annual revenue of $5.534 billion.
Now, when did the dark days begin for the company? It is important to note that Motorola’s decline was caused by several unfavourable events rather than one major incident.
The partnership that didn’t serve well:
Motorola was once the leading manufacturer of mobile phones until Nokia surpassed it in 1998. But, at the time, Motorola company was working on an unusual initiative through its spin-off, Iridium SSC.
Iridium wanted to use space satellites to provide wireless phone service worldwide. However, Iridium declared bankruptcy in 1999 after spending $5 billion. At the time, the company was having difficulty attracting consumers because its handset and talk time would cost significantly more than existing products. Since the bankruptcy, Motorola has been sued for $4 billion in penalties by Iridium creditors who claim that they were breached of contract. This certainly was not good for the company and affected its customer base on a huge level.
Motorola didn’t think of the future:
Motorola was originally a hardware technology company, but by the mid-2000s, software was driving the mobile phone business. When compared to competitors, Motorola’s phone interface was considered complex, and their cell phones alternated between Linux and Windows-based operating systems. Products such as the Motorola Q, a Blackberry-like smartphone with a QWERTY keyboard, performed severely compared to the competition, whereas the introduction of the Apple iPhone in 2007 changed the game for everyone, transforming the mobile phone into a pocket computer.
The company introduced the Motorola Razr series to concentrate on its main business after failing to complete its side project. Around 120 million Razr v3s were sold globally after its 2004 release, making it the most popular clamshell phone.
When Motorola was divided into pieces:
Motorola took on various steps to keep itself going. But nothing seemed to have worked out for it. Soon after introducing the Motorola Razr series in 2005, Motorola and Apple teamed up to release the Rokr E1, which was compatible with Apple’s music shop. However, Apple ended the collaboration when it introduced the iPhone in 2007.
Motorola refocused on producing Android phones under CEO Sanjay Jha in 2009, introducing its Droid phone line, which was picked up by US telco Verizon. In the United States, Droid sales surpassed those of the iPhone, prompting Google to consider purchasing Motorola. As a result, the company was divided in two in 2011: Motorola Mobility, which concentrated on consumer devices such as mobile handsets, was sold to Google in May 2012 for $12.5 billion, leaving the residue as Motorola Solutions.
Motorola has fallen into the struggling business category as a consequence of its inability to grow, a lack of urgency, and its failure to innovate, and keep up with the latest developments. These are some of the main factors that contributed to the brand’s challenges and eventual failure of the company.
The lay-off laid Motorola off the charts:
Every aspect of Motorola’s P-O-L-C (planning, organizing, leading, and controlling) management was a failure. When the company initially started, CEO Bob Galvin had a clear goal and inspired the team, but after he left, the business lost its direction. Their most significant mistake was failing to realize that the 3G market was expanding and making their 2G phones obsolete. Motorola failed to effectively organize its human resources as a result of its massive layoffs, sixty failing enterprises, and worldwide scattering.
The management at Motorola failed to communicate a clear vision and objective, which was another problem that contributed to the company’s failure. Motorola’s office was constantly shifting or going through cultural changes, and nobody was explaining what was happening or why. As a result, there was poor employee morale, which led to performance suffering, lowering the company’s revenue. When Google bought Motorola, the employees believed they were no longer the experts on their products.
Ted Fishman, a journalist, explained in his extensive autopsy of Motorola,
“Top management believed in letting the sector heads run the businesses their way. If that rubbed others the wrong way, tough luck. There was no cohesive plan for network technology and handset technology. The two operated totally independently, in totally different directions.”
Behind Motorola’s failure:
An inability to adapt quickly and evolve led to the mobile phone company’s failure in the highly competitive smartphone industry. Its market share fell from 21% to 6% between 2006 and 2009.
What led to the failure of Motorola could have been avoided if the company’s management had been open to innovation, established a culture of innovation, and encouraged employees to innovate. We have put together over 60 real-life examples in our free e-book where leveraging the power of employee innovation, companies benefitted a lot.
To avoid the same fortune as Motorola’s failure or Xerox’s failure then implement our idea management tool in your system. Such downfall stories can be used to learn the importance of innovation in every business.
