Motorola to use 3G to close gap on Nokia

23 Jun 2003

US equipment supplier Motorola [NYSE: MOT] has announced plans to launch a raft of new third-generation (3G) mobile terminals by the end of 2003 in a bid to make ground on Finnish giant Nokia, the runaway leader in the global handset market. Last week Motorola president Tom Lynches said his company plans to launch four new 3G handsets over the next six months as well as more than a dozen new GPRS-enabled 2.5G terminals with colour screens. Motorola and Nokia each currently have just one 3G handset on the market; Motorola introduced its A830 in March 2003 for Hutchison 3G’s network launches in the UK, Italy and Austria, whilst Nokia launched its first 3G terminal, the 6650, at the beginning of June for Japanese operator J-Phone, owned by Vodafone. Initial reports suggest Motorola is on the right track to steal market share away from its Finnish rival, with industry reports claiming the Motorola A830 is is a far superior terminal with better functions and is outselling the Nokia 6650 by a long way. Motorola has also licensed its 3G technology to German company Siemens, currently the fourth largest handset supplier in the world. Siemens’ new 3G phone, the U10, is based on the A380 and was launched on Hutchison’s Austrian 3G network two months ago. Motorola is planning to launch two new terminals on Hutchison’s 3G networks over the next two months, the A835 and the A920; the former is an upgrade to the A830 incorporating video-conferencing facilities, whilst the latter is a modelled on a personal digital assistant (PDA) with a touch screen interface. Both new models are fitted with global positioning system (GPS) facilities.

Motorola is the second largest provider of communications and electronic solutions in the world, after Nokia. The Finnish giant stole the top spot in the mobile terminal market from Motorola in 1998 and held a 35% share of the sector at the end of March 2003, compared to Motorola’s 16%. Up and coming Korean supplier Samsung has been increasing its market share hand over fist in the past two years and now controls around 12.5% of the market, ahead of Siemens with around 7.5%. In fifth spot is another Korean equipment manufacturer, LG Telecom, which with around 5% of the market recently overtook the underperforming Sony-Ericsson joint venture.

manufacturer's preliminary 1Q 2003 shipments