miedla 25
OPINION 2
Motorola needs a solution, not an escape hatch
Motorola has revealed that it
PERSPECTIVE is consideringseiling its hand-
set division.The surprise isn't
so much in the restructure;
with the company's bleak
share performance, it's to be
expected that investors like
billionaire Carl Icahn will de-
mand change.
What isn't entirely clear,
however, is whether any mo-
bile phone rival will want a
piece of Motorola, or if the
company will fall into the hands of a private equity
firm. Could this be the end lor Moto?
For all its troubles. Motorola has a sizeable presence
in the US market that you'd assume would be appeal-
ing to a Korean, Japanese or Chinese brand with glob-
al ambitions.
Yet some weeks on and no Asian brand has ex-
pressed interest in some sort of deal.
Of the likclysuitors — LG.Samsung.Sony Ericsson
and Lenovo — none appear inclined to take on the
risk of acquiring Motorola's business, despite its
strength in America (where it controlsaboutathirdof
the mobile phone market).
Who can blame them? After all, the deal isn't neces-
sarily a case of one plus one making two.
AnAsian mobile phone brand with an eye on Amer-
ican consumers may not necessarily inherit Motoro-
la's US market share because of the strong influence
Brands must hecome thick' in order to be sticky
A couple of weeks back,I saw an adver-
tisement for Quaker Oats, recently
launched in India, extolling its nutri-
tional value. I had an epiphany of sorts
(something! usually try to avoid, as this
is the kind of thing that only American
moviestarsdo)anditwasthis —brands
like Quaker Oats no longer have any
genuine reason for being.
1 don't mean tosuggest that itsdemise
is imminent; simply that the produet
has outlived its purpose as the world
which created and valued this kind of
brand is fast disappearing. Why does
India need a Quaker Oats tocóme and
tell us about the virtues of oats?
I can understand why India needs an
iPhone or even Nike, for they bring a
unique piece of culture along with
them. But how can a company sell a
commodity to the world and grow so
large and profitable? What makes any
company selling something undiffer-
entiated in a generic way better suited
to handle local needs and tastes than a
local company?
The only difference between a multi-
national and a local company is money
and the knowledge that consumers will
eventually fall in line, country after
country. There was a time when mar-
keting skills were a differentiator;
today that is no longer the case.
wielded by mobile service providers there. potential buyer is likely to wait a quarter or two.
Moreover.a takeover and the restructuring that fol- It really is a sad state for a brand that once aston-
lows could not only be costly, but also dangerous if ished the industry with its cutting-edge product lines.
BenQ's experience is anything to go by. Motorola was the pioneer in the low-end space and
And who can forget BenQ? Its story was the most rolled out Razr at a time when no one else was doing
high-profile failure by an Asian brand to acquire a thin.at least not well. Moto's advertising in China has
struggling Western mobile company.The brand itself been both award-winning and effective, thanks to a
was making headway until it tried to jump-start its in- partnership with Ogilvy.
ternational push by buying the struggling handset But the brand has struggled to offer a wider portfo-
unit of Siemens.The deal, sadly, proved too rich and lio tor the extremely competitive mid- to high-end
theTaiwanese company eventually went bankrupt. segments, and seems to have lost touch with the con-
The more established Asian brands may find in- sumer. None of the successors to Razr have been orig-
creasing marketing spend an easier inal enough to persuade consumers.
way of boosting presence without the who are increasingly demanding con-
potential hazards. No Asian brand vergence of devices, lo trade in their
Which leaves smaller Chinese hard-
ware makers such as Huawei (bud-
has expressed Nokia or Samsung.
It almost seems that Motorola has
ding international brands). interest... Wiio staked long-term success on short-
Likely suitors, yes. but many of the
mainland mobile handset makers are
can biame them? term gains — a Wall Street mentality
that's decidedly different to how
struggling themselves and there are Thedeaiisnta Nokia tackles the market.
hints that even Lenovo (China's
largest with nearly six per cent share) caseofonepius Moto needs help. But stopping out
of an industry it once — nol so long
may quit the handset business alto-
gether. Could they afford the hefty
onemaiûngtwo ago — dominated isn't the only an-
swer. It still owns much of the mobile
US$8billionorso price tagslapped on Moto? spaceintelleetualproperty —and that isa strongbase
Even if they could, it won't be easy to turn around to work from and to work with. What the brand needs
such a big ship, and whoever comes on board will is leadership that's more strategic, consumer-focused
struggle in the initial stages. But don't expect that to andmarketingsavvy.
happen too soon. Motorola's results in Q4 weren't
great, but not terrible. With more losses expected, a atifa.silk@media.com.hk
Everyone has the same kind of peo- phasising one aspect of an existing
ple, uses the same kind of research and product attribute or benefit, the con-
hires the same kind of agencies.The ad- sumer would be persuaded to buy)
vantages of being a multinational are made sense once.
slowly being peeled away, especially in The consumer saw the idea of a prod-
cases where product innovation is slow uct as something essentially immobile;
and brands are thin. the brand was a temple built to this
Gilbert Ryle used the idea of'thick' deity. By putting moisturiser in soap
and "thin' to distinguish between those and talking about soft skin. Dove has
descriptions that had layers of contex- built a powerful global franchise — and
tual meaning and those that didn't. A it has thus stayed relevant by becoming
lot of multinational FMCG brands are a "thicker* brand and moving beyond
wafer-thin when it comes to packing in the first level ofmeaningdelivery.
meaning. If Quaker Oats is about an The truth is that the idea of the prod-
ideology, a belief system or a way of life uct has been redefined thanks tochang-
that makes sense to the Indian con- ing technology. Anything manmade
sumer, then it will thrive here. needs relentless mutability in today's
But if it is about oats what do — which world. FMCG products just cannot
is, to provide nutrition and improve keep pace: they are unable to make us
health — then we have a hundred bet- view life through a constantly refract-
ter options. We have traditional foods ing lens.
that do just as well, we use oats in any Traditional advantages like financial
case in traditional meals and we have muscle, distribution, reach and adver-
local companies which today have the tising spend are all being blunted.
skill and the finaneial wherewithal to Venture capitalists are pleading with
build brands. people to take their money, the internet
The trouble with a lot of FMCG has redefined the idea of distribution
brands is that they are rooted in the as- and, more importantly, of scale — no
sumptions of the 20th century.The idea brand, however big. can forcibly domi-
that powerful brands could be built nate the worldwide web, no matter how
worldwide merely by offering a good much it spends.
quality product with the help of posi-
tioning (which really meant that by em- Santosh Desai, CEO, Future Brands