Mobile Phones account for around 30% of Motorola Mobility's (
) stock, based on our estimates, and any change in the company's
mobile phone share can have a profound impact on its stock
price. Motorola's mobile phone share has tumbled down from a
high of 22% in 2006 to less than 3% currently due to lack of
technological initiatives and innovative products and strong
competition from formidable players like Apple (
), Nokia (
) and Research in Motion (
) in the smartphone segment.
We expect this decline to continue, although at a slower rate,
reaching 1.5% by the end of Trefis forecast period. However, if the
share decline lessens to around 2.4%, as predicted by Trefis
members, this can create a potential upside of 24% to MMI
We currently have a
Trefis price estimate of $19.32 for Motorola
, which is well below 35% the market price.
Limited Offerings of Innovative Handsets
Motorola saw a high market share in 2006 owing to its popular
handset RAZR, but its rage has died down amid the technologically
better breed of smartphones sold by RIM and Apple. Absence of a
branded product like Apple's iPhone or RIM's BlackBerry has cost
Motorola heavily on its market share. It has particularly lost
share in North America due to lack of technological innovation and
limited offerings of 3G products.
Motorola is trying to make a comeback by offering a fresh breed
of smartphones like Cliq, Bravo, Droid and Moto powered by Android
operating system, which is gaining wider adoption by the day. Of
its handsets offering, Droid X is particularly doing well, having
featured in top 10 smartphones for 2011 in terms of design,
multimedia and memory features.
Superior Product Portfolio of Competitors
Increasing competition from rivals like Nokia, Samsung, Sony
Ericsson and LG have taken a toll on Motorola's market share.
Motorola has not been able to compete with these players, who have
continuously launching newer and better products in the 3G segment.
The handsets market is also getting crowded, with entry from
Chinese players like ZTE and Huawei, who are offering comparable
quality of handsets at cheaper prices.
Trefis Community Forecast
Trefis members predict Motorola's mobile phone market share will
decrease from 3.5% in 2011 to 2.4% by the end of the Trefis
forecast period, compared to the baseline Trefis estimate of a
decrease from 2.1% to 1.4% during the same period. The member
estimates imply an upside of 24% to the Trefis price estimate for
Motorola Mobility's stock.
complete analysis for Motorola Mobility's stock is