The End (or Beginning?) of an Era in Cell Phones

The much-anticipated word is finally out today that Motorola will split into two companies on Jan 4.  Though there may not be much impact to the industry today, the move is quite historically significant.

You see, Motorola pioneered the communications industry having invented the Walkie-Talkie and creating the communications gear that landed on the moon.  The first cell phone, the Dyna-Tac, was also invented by a Motorola employee, Dr. Martin Cooper, in 1973.

Motorola Dyna-Tac

Motorola later went on to grow its business in cellular handsets and as recently as 2007, was the #2 handset vendor worldwide, behind Nokia.  Motorola was struggling, however, to continue to produce compelling designs to follow on the then-popular RAZR design.  Motorola’s troubles began mounting while their share began sliding.  They are now only the 7th largest cell phone manufacturer today, allowing companies such as Samsung, LG, RIM and Apple to pass them.

Upon the urging of famed investor Carl Icahn in 2008, Motorola set a plan to split the company into two pieces: one to handle the consumer products such as cell phones and set-top boxes, while the other managed the products for government and corporations such as radios for police and public transportation.

Motorola then recruited cell phone veteran, Sanjay Jha, from Qualcomm to lead Motorola’s handset unit back to profitability in preparation for the impending separation.  Motorola began to focus more on Smart Phones based on Google’s Android operating system.  Motorola has met with modest success in this line of Smart Phones, which have a higher profit margin than standard cell phones.  This allowed Motorola to post its first quarterly profit in 3 years.

Motorola is now in a position to split apart into the consumer-oriented Motorola Mobility and the corporate-focused Motorola Solutions companies.  Is this the end of an industry titan, or the beginning of a more flexible and focused consumer electronics manufacturer?  Only time will tell, but Motorola Mobility has its work cut out for them…

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Sony PSP Phone – Fact or Fiction?

There has been a lot of hype up till now regarding the possibility that Sony is working on a PSP (Play Station Portable) phone.  Rumors seem to be gaining credibility as Engadget posted photos of what appear to be a prototype:

Possible PSP Phone Prototype: Photo from Engadget

On an earnings call, Sony CFO Masaru Kato commented:

“As for the new PSP product, as mentioned, I know that you are not asking me to tell you when we will be coming out with a new product, but there is a gaming market based on cellphones, and there are many changes that are being seen [with] Nintendo, as well as ourselves, in the field of the product for the gamers,” he said. “Of course, we can’t talk about specific products, but smartphones and tablets… it is difficult to tell you how we can put the games on them, but they are not going to be planned in different parts of our company.”

“When we organized ourselves last April, we introduced Network Services, and within that umbrella… all of these products are handled. Therefore the planning and the prototypes for various content [are] all carried out within this… one umbrellas,” he added. “So we are trying to figure out what we can do as Sony in this market. I think this is as far as I can tell you regarding these products at market.”

Specs include a 1GHz Qualcomm CPU, 512MB of RAM and 1GB of ROM. Screen size is expected to be approximately 4 inches. Of particular interest  is the multi-touch trackpad running horizontally across the lower portion of the phone and in-between the standard PSP controls.  In addition, the likely OS will be a version of the Android OS.

However, I’m a firm believer that a product’s success is not decided by its included components.  It’s all about the feature set, user interface and supporting infrastructure – the overall user experience.  That cannot be judged at this early stage.

It’s apparent that Sony sees itself in a “must change” environment.  There are strong new competitors creating new mobile device segments, and Sony must be able to adapt and create their own niche in order to once again flourish.  By all means, Sony is not out of the picture, but they have their work cut out for themselves.

Learn more about the author at: http://paulkaplan.net