Motorola Loses Cell Phone Market Share to Samsung and Nokia

Press Release - June 21, 2007

Motorola Inc. could be on the verge of losing its #2 position in the global cell phone market to South Korean rival, Samsung Electronics.

The U.S.-based handset maker’s worldwide market share has dropped to an estimated 15.3%, from RAZR-induced highs of 22% last year, according to a recent report by CIBC World Markets analyst, Ittai Kidron. The company has been in a serious slide when the Motorola RAZR, North America’s most popular cell phone through much of 2005 and 2006, experienced a sharp drop-off in terms of both sales and profit margins.

During the same time, Samsung has seen its market share climb steadily, reaching an estimated 14.5% this quarter, while market leader, Nokia, whose position was threatened by Motorola just one year ago, has seen its global share soar to approximately 37.4%.

Motorola was “getting close to Nokia and they’ve really fallen off that pace,” explained Jupiter Research analyst, Neil Strother. “That’s as big a disappointment as potentially losing the No. 2 position.”

Motorola, however, plans to fight the trend in the second half of this year with an ambitious new line of cell phones based around the RAZR2, and Strother predicts that “unless they really stub their toe,” Motorola probably won’t slip behind Samsung in the immediate future.