According to Ron Garriques, executive vice president of Motorola's personal communications sector, markets in the developing world -- especially China and India -- are emerging as the battleground for mobile-device makers.
Today, Illinois-based Motorola leads in North America and is investing heavily in China, said Garriques during a talk at the recent 2005 Wharton Technology Conference. Motorola's archrival, Finland's Nokia Group, the world's biggest cell phone maker, trounces everyone in Europe and has a hefty head start in the developing world. "The high-growth markets are India, Pakistan, the Middle East, Africa, Turkey and all of South Asia," he said. "These markets are dominated by Nokia, with over 60% market share. Nobody else has more than 10%."
But the number of potential customers in these places is so huge -- about 4 billion people in the world have never used a phone of any kind, Garriques stated -- that the markets are effectively wide open. Nigeria, for example, "has 160 million people, more than half the population of the United States, and our industry has almost zero penetration there."
Cell phones and other mobile devices such as Blackberries represent more than just additional gizmos that western firms can peddle to consumers elsewhere. They are also a way for developing countries to accelerate their growth by skipping over the lengthy, costly process of installing landlines and computer networks to support them. In many places, consumers can jump directly to wireless services without ever having used landlines.
As the fight for these new markets takes shape, Motorola and Nokia figure to be the leading players. Motorola is known for producing chic, sleek "clamshell" (or flip) phones, while Nokia pumps out cheaper "candy-bar" phones that provide the company with better margins. Analysts say Motorola's profit margin averages about 10% compared with 16% for Nokia.
The $100 billion industry produces approximately 700 million mobile phones annually, Garriques stated.
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