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Analysis: Apple should learn from Motorola's fate

Posted: 16 Jul 2009 ?? ?Print Version ?Bookmark and Share

Keywords:Apple Motorola? mobile market? iPhone?

Apple Inc.'s strong growth and torrid market share gains with the iPhone is justifiably celebrated by industry executives but there is a cautionary tale somewhere in Motorola Inc.'s experience for the PC and consumer electronic equipment company.

The danger Apple faces is that consumers who have so excitedly welcomed the iPhone could just as quickly turn on the product and abandon it for often whimsical reasons especially if the company fails to maintain the innovative process that has helped it capture a huge chunk of the smart phone and digital music player markets.

Just ask Motorola, whose Startac and Razor phones blew away the competition and helped it come ever so close to displacing Nokia as the world's largest supplier of mobile handsets.

Today, Motorola is a shadow of its once glowing self, its sinking market share and pallid market capitalization$13.9 billion vs. Apple's $127 billionmirroring the image of a company many investors now view as a relic of the past.

By contrast, Apple's hefty market value is reflective of the market's view of the companyan innovative enterprise considered far ahead of even sector leader Nokia Corp. in designing and introducing products that easily capture consumer attention.

Although it is still the world's biggest vendor of wireless handsets, Nokia seems to be drifting off investors' radars as shown in its market value of $54 billion, less than half of Apple's market capitalization.

Unlike Motorola, the ex-arch rival it pounded painfully into near oblivion, Nokia continues to maintain its strategy of rolling out good, solid and dependable products that help maintain its market share but lack the "wow" appeal of the Razor and the iPhone.

Even now, few mobile handset customers anywhere in the world can mention a single current or historical Nokia product that upon introduction oozed the compelling "must-have" appeal of the iPhone and the Razor.

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