Motorola's Double-Edged RAZR Success

RAZR debuted in October 2004. That was 10 months ago. There's no doubt the old warhorse still has some fight left in it, but it won't survive the competition that is arriving this autumn. New models from rival brands feature better cameras, better software and more memory, and they also pack new design features that are either directly competitive with the RAZR (Samsung's new ultra-slim models) or subtly undercut RAZR by shifting to new niches (the slider and music-player models are arriving just about now).

No phone lives for two Christmases, and Motorola is currently prepping RAZR's follow-up models for the new Christmas season. PEBL is an ovoid version of RAZR, and SLVR is a bar-phone version of RAZR. If there is one ironclad rule in the phone industry, it is that no sequel ever does as well as the original design. The real blockbusters tend to be one-off designs that capture consumer interest by being different than the previous hit, not by copying and refining an existing trend.

Motorola may break the rules and maintain its market-share growth in the fourth quarter of 2005. It may turn PEBL and SLVR into hits even bigger than RAZR, climbing to 20% market share by end of year. But I don't believe that.

More likely, Motorola will follow the Samsung route and have a good third quarter and then face a difficult transition as RAZR runs out of steam and a new generation of challenger models rolls in.

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