Motorola Has Come Back!

Motorola, which had invented the radio, car phone, pager, and CDMA cellular phone, has declared that it will regard 2004 as the “Year of Pride Retrieval.” It has a long history as a giant company in the wireless communication market. Being equipped with both, tradition and ability, it is the world’s second largest wireless company. However, in the Korean market, it has come to crisis nearing business failure.

Motorola’s market share was diminished by Anycall. Until 1995, Motorola held 70 percent in the Korean market. Although the brand of Anycall by Samsung Electronics remained at the 10 percent level as a minor brand at that time, their swift efforts of conversion into digital technology and their advertising phrase, “Strong in Korean landscape,” boosted their market share to 50 percent in 1996. In the same year, Motorola’s share plunged to 10 percent and into to the single digits in 1997. Longing for their prosperity in the analogue era, Motorola has failed to show any new hit models except the “Startec” series released in May, 2002. Consumers have also forgotten their existence.

And then, in October 2002, Jin Jung-hoon, the Korean vice president of Motorola, who is placed at the fourth level in the company’s hierarchy, settled in Korea. In the viewpoint of Jin, the obstacles that were hindering the growth of Motorola were none other than the conservative managing principles of the headquarters. The rapidly changing market of Korea was hard to grasp by the Korea branch office which is ignored under the influence of the Asian area headquarters. Jin has changed the branch office in Korea so it is now directly connected to the headquarters of Motorola. Awaking from the 70 year old principle, “We don’t use the entertainer as the commercial model,” he has informed the headquarters that he would employ Jung Woo-sung, one of Korea’s celebrities, as a commercial model.

“Let’s play a contest, Samsung” –Over the next year, Motorola is planning to debut 15 brand-new cellular phones by Jung Woo-sung on their commercials. The symbol of fame retrieval, “Startec 2”, “Spinmotto” which can be unfolded by turning the front cover, and “Showmemotto” which was designed by the concept of motor racing circuits will be debuted one by one, aiming at possessing 10 percent of the market which is expected to reach the 150 million mark this year.

The vice president of Motorola, Jin pledged that “By changing the image of the ‘old and coarse’ into the ‘young and cool,’ we will revive in the Korean market without fail.”

Samsung’s position is that “It is preposterous. . . Cellular phones have already passed over the boundaries of the cellular phone. They are not just phones anymore.” Samsung has worked out a strategy that will infuse brand-new products into the market such as 3 mega pixel camera phone, satellite and ground frequency DMB exclusive phone, and W-CDMA exclusive phone, proceeding far ahead of Motorola in advance of their movement.

On the other hand, the market surveyor, according to the survey results gathered by Strategy Analytics on February 4, stated that Motorola’s share of the world market has decreased from 16.3 percent in 2002 to 14.5 percent in the last year. Alternatively Samsung has increased from 9.8 percent to 10.8, making Motorola commercially anxious.

It is hard to predict which company will smile at the end of this year. Is it Samsung Electronics which is aiming at the second place in the world market or Motorola which is trying to defend its seat?

Seong-Yub Ra cpu@donga.com