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Aug 27 2008 3:53PM EDT

Why New Cell Market Share Numbers Spell Bad News for Moto

Kevin Maney writes: Gartner Group just released its latest report on global handset sales, and it looks like the situation adds up to a heap of trouble for Motorola -- the last remaining broad-based American cell phone maker.

For starters, Moto's market share continues to fall. Gartner says it now has 10% of the global market, down from 10.2% a year ago. Nokia is first with a dominating 39.5% and Korea's Samsung ranks second at 15.2%. Coming up fast is LG Electronics -- also Korean -- with 8.8%, up from 6.8% a year ago. LG has set its sites on passing Motorola for the third-place spot.

Worse for Motorola, it has been an also-ran in emerging markets, where growth in handset sales is strongest. Those markets are a strength for Nokia.

Even worse news for Moto: Gartner says global growth in handset sales will slow this year by a few percentage points, thanks to weak economies. Motorola is trying to reinvent its handset division under new co-CEO Sanjay Jha. The task is tough enough already, but even tougher if the global pie is shrinking.

One point about Motorola's handset troubles rarely gets raised: What if the U.S. winds up all but left out of the handset business? Motorola is the only American company selling large volumes of cell phones across the spectrum of prices and features. Sure, Apple has the iPhone now, but it's a high-end phone for a small slice of the market.

Cell phones are possibly the most important single technology device on the planet, and if trends continue, they'll all be made by companies headquartered in Finland and Asia. Wonder if anyone in Congress has even considered that.

 

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