Motorola loses market share

Ed Zander could come under renewed pressure to step down as chief executive of Motorola on Thursday as new figures showed the handset maker lost more than seven percentage points of market share during the second quarter.

Motorola narrowly maintained its position as second-largest handset manufacturer – but its share of global sales fell to 14.6 per cent, from 21.9 per cent a year ago, according to estimates by Gartner, a research company.

Samsung, the world’s number three, increased its share to 13.4 per cent, gaining prime position to overhaul its US rival. “It will be interesting to see what Samsung can do in the third and fourth quarters. Samsung has been bringing in more mid-tier handsets and cutting prices on older phones faster to help build market share,” said Carolina Milanesi, an analyst at Gartner.

US analysts and IDC, a rival market research firm that published global handset sales figures this month, reckon Samsung passed Motorola in the second quarter. US analysts also reckon Motorola’s market share may dip further before stabilising when handset models to include the 3G Razr2 are launched in many markets in the next months.

Mr Zander has acknowledged more work is needed, but he said last month Motorola’s management team was beginning to make progress in turning round the lossmaking mobile phone business. It accounts for about half of Motorola’s revenues. Analysts said Mr Zander should take the blame for a failed strategy that has seen Motorola pull away from selling lower-priced mobile phones in emerging markets.

The market share figures are Motorola’s lowest since the third quarter of 2004, before it launched the ultra-slim Razr handset in 2005, which helped lift market share into the 20s.

The Razr has sold more than 50m units, one of the most popular handset models marketed. But Motorola has struggled to find fresh products with the same popularity.