Motorola lost 1.3 million RAZR customers to iPhone
By Will Park on Sunday, June 22nd, 2008 at 2:17 PM PST In Announcements, Motorola, Research, iPhone
While the floundering handset once-juggernaut tries to fool itself and the public that a commendation for “teamwork” is as important as actually pumping out handsets that are worth anyone’s time, it seems Motorola (NYSE: MOT) has proved, once again, that “the bigger they are, the harder they fall.”
Oh yes, Motorola was once huge. They were a global handset manufacturer to be reckoned with. The Motorola RAZR turned the industry on its head and every manufacturer worth their salt scurried to produce a slim handset that could compete with the RAZR. But, after years of milking the same RAZR-cow, Motorola has ended up with nothing more than memories and regrets.
The latest handset manufacturer to hit the scene and stir up the pot is Apple (NSDQ: AAPL). The Apple iPhone has shocked the handset industry in to yet another scramble for sleek touchscreens with clean lines and intuitive UIs. Alas, the same folks that were drawn to the Motorola RAZR’s gotta-have factor and sleek design have reportedly jumped ship to the new hotness from Apple.
A recent JD Power survey found that a full 24% of Motorola RAZR users (20,000 users polled) decided to ditch their aging and barely functional clamshell to the huge multi-touch display on the Apple iPhone. Now, with 5.4 million iPhones sold to date, that the survey points to 1.3 million former RAZR customers fully embracing the iPhone.
Sure, the original iPhone has its flaws, but RAZR-lovers have apparently seen past the lack of features and are now enjoying their iPhone. Which begs the question, how many more RAZR-defectors will the iPhone 3G attract?
In the end, this should be yet another message to Motorola. Get your act together and concentrate on the high-end. Give consumers something to really get excited about. A 5 megapixel Kodak camera is great, but when you leave out 3G data connectivity, and keep it locked in to Asia, you’re not going to recoup those R&D costs. Of course, Apple left 3G out of the original iPhone, so you might be thinking it was acceptable on the ZN5 – but then you’d be wrong. The iPhone has so much more going for it that EDGE is acceptable. The Motorola ZN5? Not as much.
Concentrate on keeping customers for the short-term. Customer defections are going to drive you in to the ground. Prioritize handset development for the long-term – and ditch all your preconceived notions of success, the RAZR model no longer applies.
There’s nothing I want to do more than write about Motorola’s fantastic turn-around and successes. Please let me do that.
[Via: InformationWeek]
Just wait till the app store launches on the iPhone. I think this is the killer feature that is making the competition shake in their boots. I’ve seen some announcements and there are some amazing stuff coming soon.
Motorola RAZR = Poor batteries/life. Display/ribbon cable issues. Easily liquid damaged and broken. Unable to charge and other software issues. All it had going for it was an eye catching design.
RAZR would make me want to use 2 cups and a string.
iphone is slightly a better phone than the lousy Razr which certainly deserved this beating.
Seems apropriate because both the phones are terrible. It would only make sense that people who are used to a terrible phone would want to stay with one.
So. . . 25% of iPhone users have never used a smartphone and are newbs. . . officially. . .
That’s one way to look at it, Raidium
Here’s the way I look at it. The iPhone, with all its current drawbacks, appeals to an incredibly wide-range of mobile users – the likes of which we haven’t really seen before. Everyone from power users to complete “newbs,” as some might put it, are attracted to the iPhone.
That doesn’t mean that other platforms or handsets aren’t awesome, it just highlights the iPhone’s overall appeal.
I can’t wait to see what the iPhone 3G does for Apple’s smartphone marketshare.
Oh, Will, You already know that it’s only going to bring Apples marketshare skyward! All those who have been attracted to the iphone originally but were still in contract will definitly be considering the phone even more now that their agreement is just about up and its improved sence launch!
My only concern about that is all the existing customers that have already decided to say ka-poot with AT&T and Apple because of the newer 3G being alot more inexpensive conpared to the original. I’ve heard my share of “complains” about Apples decision to make the new phone more affordable and the customers not being offered any sort of compensation reguarding their previous purchase. I already have 3 customers coming back to drop AT&T and go with the Instinct as soon as we get restock!
I hope Apple has a plan to counter this and soon because this could spell disaster for them! Not on a “galactic” scale but still… Noone wan’t to lose customers.
But then you also have to consider all those who are going to drop their current service to switch over to AT&T to get there hands on one…
No doubt that Apple and AT&T are in business to make money, but I agree that the price drops on the original iPhone and the new pricing structure will be angering many.
I’ve already resigned myself to shelling more than is healthy to get the latest and greatest in mobile, so the price isn’t as much a complaint for me. What bothers me is the philosophy behind the business practices.
I’m sure I’m not alone and I’m sure there will
be those more idealistic than myself that will shun the iPhone 3G for an Instinct or LG Dare/Voyager. Have you gotten those in stock yet, by the way, Raidium?
Man I WISH! We have sent out an order for our phones and have gotten back a nice email telling us that they won’t be shipping them due to a shortage or some bull. That’s what I’ve been told by the manager anyway, not sure exactly. We still haven’t gotten word as to when OUR store will be receiving the QChat capable phones either!
But then again, it’s not the managers job to order the phones, it’s the owners so I’m guessing they were just feeding me some stuff. They like to do that. lol.
Sounds about right. I only ask because my other third-party retailer contact informed me that they’re not going to take shipment until late summer.
But, when the Dare comes in, it should be worth the wait (especially from a sales standpoint)
lol. I was just informed by the owner that we haven’t even had the opportunity to order the phones. They told me that our Sprint Sales Rep and her had a talk about the phones. So yeah…
Will, good analysis overall, but unless I’m mistaken in my interpretation of the meaning of the JD Power survey, you’ve made a logical error in jumping from “24% of Motorola RAZR” ditching their clamshell in favor of the iPhone to 24% (1.3MM) of the 5.4MM iPhone users being former RAZR users (unless there were exactly 5.4MM RAZR users as well).
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