Motorola lost, with no direction home

 

While Nokia's continued emergence as a major multimedia player remains the subject of conversation across the mobile industry, at least one rival handset exec is unimpressed. Speaking last week in front of faculty and students at the University of Chicago's Graduate School of Business, Motorola CEO Ed Zander rolled his eyes at Nokia's $8.1 billion acquisition of navigation software developer Navteq, calling the price tag "stunning." According to Zander, Motorola previously explored a Navteq deal of its own, but determined the firm wasn't a good strategic fit: "We looked at it and went on our way," said. "We didn't even think about it." Zander went on to further criticize Nokia's multimedia push, including the launches of its digital music download platform and its mobile social network Mosh: "That's not our strategy," he sniffed.

It's reassuring to know Motorola has a strategy, but the fundamental changes sweeping across the handset market seem lost on Zander. He's clinging to a compartmentalized wireless business that's long gone and not coming back. "We are not in the applications business," Zander insisted last week, warning against the dangers of "getting into the business of your customers." But recent moves by companies like Nokia, Apple, Google and Microsoft have rendered black-and-white distinctions like "handset maker" and "software developer" obsolete--the businesses that promise to dominate the mobile space will span the breadth of the industry, not just one slice of the pie. The longer Motorola refuses to bend, the deeper the trouble it faces--sooner or later, Zander's decision to pass on Navteq will haunt him, perhaps when he discovers he needs a navigation system to find his way to the unemployment office. -Jason

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