Now Motorola is said to be doing badly because the Razr ceased to be fashionable after I bought one!
But seriously, if people are upgrading phones in less than 24 months on average, the second-hand market must be huge. Is this the answer to solving the affordability barrier at the Bottom of the Pyramid?
Motorola’s fortunes have plunged along with the price of its Razr. Its profits have collapsed, and it announced plans last month to lay off 3,500 workers. Since last October, its stock has dropped 30 percent, attracting the attention of the billionaire investor Carl C. Icahn, who bought 40 million shares last week on a bet that he could push the company to do better.
At first glance, the company’s troubles are puzzling. Almost one billion mobile phones are sold worldwide each year, and Motorola has almost a quarter of the market. Consumers are also replacing their phones faster, on average less than every two years.
But the cellphone business is still relatively young, and Motorola is learning a cruel new lesson about consumer tastes in phones. An industry that has focused more on microchips, screen size and data speed is finding it has more in common with the fashion business.