Motorola Discusses Market Share Gains and the "Must-Have" Handset in China (MOT)

Jul.20.06 | About: Alphabet Inc. (GOOG)

Excerpts from Motorola's (MOT) Q2 2006 earnings conference call transcript:

Ed Zander - Chairman and Chief Executive Officer

Turning to North Asia, the story continues to get better. Unit shipments were up nearly 200% year over year. Market share is up 10% year over year. Our investments in distribution and our marketing strategy that we talked about over the past several quarters, on improving our retail presence, have enabled us to restore our share to more than 20% in China. Additionally, we continue to grow in South Korea, where we now hold 11% of the market.

While RAZR is the Motorola flagship, our Smartphones are strengthening our portfolio. In fact, our new A1200, or MING, which we launched in Q1, is the must-have handset in China. Hits such as RAZR and MING, in addition to our complete line-up across price tiers, including the C11x, C139 in China, MS500 RAZR and Z Slider in Korea are contributing to this growth.

MING -- and we don't get to see that here in the United States, you have to go to China -- this is our RAZR in China. It is the hit. It is the MOTO A1200. It is the device to be seen with in China, Hong Kong and Taiwan. Momentum is growing for this newest addition to our suite of Linux Java Smartphones. It is the number one Smartphone in China.

From the Q&A:

Edward Snyder - Charter Equity Research

Thank you. Given your strong unit performance in phones here, I was just wondering if you saw a mix shift more towards edge phones, especially given that China, and this is for Ron, this portion, China is obviously not deploying 3G anytime soon. Are you seeing an increased interest in edge deployments there? Do you expect demand for those types of phones to start picking up?

Ron Garriques - President of the Mobile Devices Business

If I look across all of the technology that we support, the one technology that clearly is being driven harder than all other technologies -- more than CDMA, more than UMTS, more than HSDPA -- is edge technology.

I think if you look, the two markets that were really invested the most heavily in was the China market. I think if you see, we have actually doubled our share position from 10 points a share to over 20 points a share in the China market here, quarter over quarter.

Daryl Armstrong - Citigroup

Thank you very much. Ron, I wanted to ask you a question about China. Clearly, you guys have done a pretty good job in terms of taking market share there. Is it possible to talk at all about how much of the share gains that you saw this quarter came from your expanding footprint in terms of the distribution investment versus taking share in markets where you have already always participated, such as Beijing or a Shanghai? Just so that we could get a better qualification of the returns that you guys are getting on your emerging market investment.

Ron Garriques - President of the Mobile Devices Business

Daryl, it was difficult to hear you, and if it was difficult for me, it was probably difficult for others. I think the data that would take that is not sitting here in front of me. However, clearly, as Ed went through the presentations, we picked up 4 points of market share in North America, which is very, very significant. Obviously a market that we have been in in the past. We picked up a couple of points of share in Latin America, a market that we have been in. Obviously China, we have been in -- before anybody else was in the wireless industry, we were selling phones in China.

I think from an investment perspective, the amount of investment that we are doing in China and the doubling of market share is clearly about as an efficient of a lever as you could possibly see in the marketplace.

In India, where we have not been there as long, I think you will see it takes longer for the efficiency of that investment to pay off. Maybe it takes a couple of more quarters, but where we have been, which is China, I think it is a pretty big lever.


  • Latest conference call transcripts from Seeking Alpha.
  • Why Seeking Alpha publishes conference call transcripts.