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Nokia and Samsung winners with Motorola split
- — 27 March, 2008 08:44
While Motorola is in disarray as a result of its split into separate companies, Nokia and Samsung will be able to grab market share, analysts agree.
"The short-term winners will be Nokia and Samsung, and maybe Sony Ericsson will be able to increase its market share as well," said Leif-Olof Wallin, research vice president at Gartner.
Ben Wood, director of research at CCS Insight, agreed. "With any change there is some disruption, and competitors can grab market share before it stabilizes," said Wood.
Before the split was announced Wednesday, he wrote in the company blog that Motorola competitors would use CTIA Wireless, next week's big telecommunication conference in Las Vegas, to take advantage of Motorola's woes to increase their share of a highly competitive market.
But in the longer term, Motorola can stage a comeback, according to Wood. "The bad news is that Motorola has the wrong products, the good news is that can be changed," he said Wednesday, after the announcement.
He still sees strong fundamentals in Motorola. It has a strong brand and presence in important markets like China and India.
Also, a third major vendor in the market is needed to keep Nokia and Samsung in check. "It's needed to provide some balance with Nokia. A Nokia-Samsung duopoly isn't good for anyone," said Wood.
The Motorola split is a result of its under-performing mobile phone division. During last year, it fell from second to third place, with Nokia in first and Samsung in second in the fourth quarter, and its market share decreased from 21.1 percent to 14.3 percent, according to Gartner.
Gartner's analysis of what happened is that an unspecified deal with an unnamed Asian vendor fell through and as a result, Motorola decided to go ahead with the split.
"We think it was ZTE, which still can become a force in the new company," Wallin said.
He also notes that Nokia is the only Western mobile phone vendor that has been able to compete with Asian manufacturers. Along the way, Siemens and Alcatel have disappeared, and Sony Ericsson is 50 percent Japanese.