You probably remember when people were using Motorola phones. The Motorola company is known all over the world, and even if you don’t see relatives or friends with these phones anymore, it doesn’t change the fact that the company was impactful.
But what happened to this company that used to make great phones? It’s a fact that they ended up losing big amounts of money, but not everyone knows the story behind their issues. What caused Motorola to fall after rising so high? Let’s look into what made Motorola lose its relevance.
Early Days
Motorola was established in Schaumburg, Illinois, on September 25, 1928. It all started when Joseph E. and Paul V. Galvin, two brothers, bought the Stewart Battery Company’s entire manufacturing equipment. The brothers also purchased their battery-eliminator plans. Initially, Motorola was started as the Galvin Manufacturing Corporation.
It started by selling battery eliminators. These products allowed someone to power and operate their radios on electricity. The first shop was set up in a very small portion of a rented building.
After a while, radio technology evolved, which decreased the need for battery-eliminators. After hearing that there were technicians installing radios in cars, Paul Galvin had the idea to work on something of his own with his engineers. In the end, he succeeded. His team presented one of their radios at the Radio Manufacturers Association in June 1930. As a result, he received a lot of orders for the model. The sales of this new item kept the company afloat.
At that point, Paul Galvin thought it would be a good idea to find another name for their new car radio creation. He wanted a brand name that would be more fitting for something like that. Therefore, he combined “motor” (which came from motorcar) with “ola”, which was something companies commonly used in their names at that time.
June 23, 1930, marks the day Motorola sold its first Motorola branded radio. Herbert C. Wall of Fort Wayne bought the radio model for $30, and he turned into one of the first distributors of the Motorola radio. The brand became popular and then decided to change the name to Motorola, Inc.
Over time, the brand started selling car-radio receivers to various police departments. Later, during World War II, it was able to produce the hand-held model AM SCR-536. This helped Allied communication a lot. In 1939, Motorola became a public company. It started producing radios and televisions and sold them to a wide population.
In 1973, Motorola launched the first cellular phone under its brand. The company was the leader of the cell phone market until 1998. Then Nokia took over and replaced the once-dominant Motorola.
In early 2000, the Motorola Razr was released, and it was able to sell as many as 120 million units all over the world. At the time of the Razr’s release, the company was still considered to be successful. Afterwards, as the years passed, Motorola started declining. From 2007 to 2009, it lost $4.3 billion.
As a result, the company had to be split into two parts. One of them is Motorola Solutions, which is thought of as Motorola’s direct successor. The other one is Motorola Mobility, which Lenovo purchased in 2014.
What Caused Motorola to Fail?
There are different reasons behind Motorola’s lack of popularity. Although they used to be everywhere, now people barely buy these phones. You can discover the reasons why below:
At one point, Motorola was the owner of plenty of spectrum wavelengths. But it made a mistake that cost a lot- it traded all of it for equity in Nextel. Year after year, Motorola had no sales, while companies like Sprint and Verizon had customers who would pay $500 per year. Motorola had the opportunity to purchase Nokia and/or Qualcomm, but it didn’t take the chance.
Most phone manufacturers had the foresight to think of incorporating 3G and they did it early enough to take over the market. Well, Motorola didn’t do the same, or it didn’t do it at the right time. U.S. wireless carriers were Motorola’s biggest customers, and they thought there was no need for 3G. However, this was a mistake that affected the company a lot. It should have listened to its customers’ needs instead. When Motorola jumped onto the 3G train, it was already too late.
Innovation keeps a business afloat. People’s demands change, and if they want to stay relevant, companies should innovate to meet these new needs.
Motorola didn’t invest in innovations, which allowed other companies to take over. With better options emerging, the demand for Motorola was very low. For instance, companies like Apple and Blackberry brought new products and services into the market, and people were falling in love with them. At the same time, Motorola was still hyping up the Razr, and as we know, that didn’t turn out well for it.
The main market for Motorola was the United States, so the brand focused a lot on its American customers. Sadly, this means it left the worldwide market behind. Therefore, it didn’t have too much of an impact elsewhere. This ended up contributing to its demise.
Other telecommunications companies were rushing to make things as good as they could. Meanwhile, Motorola was moving with the speed of a snail. It didn’t seem like Motorola was competing in any way. It was standing back, and it was its own fault.
The Android system was a major game-changer and would become a component of many cellphones. When Android became available, people were more interested in it than the old phones with outdated operating systems. Sadly for Motorola, it didn’t consider making Android-based phones early enough. When it eventually did, it was too late, causing the brand to slowly collapse.
What can we Learn from Them?
There are multiple things we can learn from this company. First of all, all business owners have to consider innovation. Otherwise, when people’s needs change, the business will struggle to survive. In the end, businesses will fail when people show no interest in their products or services. Obviously, Motorola didn’t innovate.
Secondly, you have to be fast when creating new products. If you don’t make an effort to be the first on the market, other companies will eventually take over.
Also, you should make sure you grow your influence throughout the entire world if you want to be successful, rather than focus on a single market. Motorola was too focused on the U.S., and it’s also one of the reasons why its impact was limited. If it had a more widespread impact in the world, it might have survived for longer.
Final Thoughts
Motorola made several mistakes that led to its demise. Not only did it fail to add 3G and make Android-based phones early enough, it also listened to the wrong people. Moreover, it didn’t work to have an impact on a wider audience. If it did things differently, maybe we would still see Motorola phones used today. Instead, people use other brands and have forgotten about Motorola. The only good part of Motorola’s tale is that it gives entrepreneurs some valuable lessons.