Motorola Still Trying to Gain Traction in India (MOT, NOK)

Includes: GOOG, NOK

Despite past struggles in India, Motorola (ticker: MOT) is reportedly focusing its efforts on the country's hot market for low-price cellphones. Key points:

India Market Statistics

  • India is the world's second-fastest-growing handset market after China.
  • According to IDC India's mobile-phone market grew 43% to eight million units in Q2 2005 from the same period of 2004.
  • Nokia (ticker: NOK) has a 58% share of India's market while Motorola has a 6% share. Samsung and LG Electronics have slightly greater share than Motorola.

Motorola in India

  • Motorola has little brand recognition or market presence in India.
  • Despite offering the most inexpensive phone in India Motorola has experienced tepid sales. Low-income consumers care as much about brands as consumers in the developed world.
  • Local wireless operator Bharti Tele-Ventures which had agreed to sell the low-cost phone put little effort into promoting it in Q1 -- mostly because Bharti's regional sales force believed Motorola had no brand power.
  • Until recently Motorola had no distribution network of its own -- though it is now quickly ramping up its sales force. It is enjoying stronger sales due to agreements with Hutchison Telecom and Bharti.
  • Motorola believes low cost will eventually drive consumers to its products and it plans to push the price even lower.
  • Motorola has run several campaigns on its higher-end phones on channels such as MTV India, but it did no marketing for the first batch of low-cost handsets it released early last year. Motorola says it plans to beef up the amount of advertising it does in India particularly for its low-cost models.
  • One planned marketing effort is to send a "Motobus" around the country to demonstrate its product range.

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