After facing harsh criticism over the sluggish introduction of its camera phone line-up, the world’s No. 2 phone-maker Motorola Inc. is hoping to regain the industry’s cutting edge by placing itself at the intersection of music and wireless. Indeed, Motorola executives have hinted at major company plans for creating a music “ecosystem,” but repeatedly decline to provide details.
“Music-we think there’s going to be a big opportunity there,” said Joe Woods, vice president of strategy and market development for Motorola’s phone business.
Motorola’s growing focus on the convergence of music and wireless is evident in its latest phone releases, which include a trio of products designed specifically for music aficionados, but also stretches back several years to the company’s marketing deal with MTV and its MotoMixer application. The Motorola label long has been associated with the brand-conscious hip-hop music scene and the youth market in general, and company officials hope Motorola’s attention to music technologies and services will further push its brand and its sales.
“Motorola has recognized that music is a very good channel, especially for the youth market,” said Alberto Moriondo, the company’s global director of content and applications.
Once the world’s biggest and most well-known mobile-phone manufacturer, Motorola has seen its market share slip to the likes of Nokia Corp. and Samsung Electronics Co. Ltd. Last year, investors lambasted the company for failing to clue into the market’s key new innovation-camera phones. While Samsung, LG Electronics Co. Ltd. and Nokia worked to flood the market with high- and low-end camera phones, Motorola was left out of the picture.
The situation has changed greatly during the past several months, and today Motorola sells a variety of camera phones in the United States and elsewhere. Indeed, Motorola’s market position probably will receive a boost due to Nokia’s sluggish first-quarter sales. However, critics worry that Motorola may continue to play catch-up in a rapidly accelerating market.
Thus, Motorola is hoping its innovations in the music department will help set it apart from the competition and reinvigorate its consumer brand. The company’s emphasis on music is evident in its mobile-phone technologies, its promotional campaigns and its software offerings.
“The end goal is to have end users associate Motorola with music,” Moriondo said.
Motorola’s two-way messaging products have been regularly featured in rap and hip-hop videos, and the company has worked with the likes of hip-hop innovator Russell Simmons and others. Last year, Motorola signed a major promotional deal with music channel MTV, which includes regional promotions and various branding efforts. On the software side, Motorola offers its MotoMixer application, which allows users to modify and re-mix ring tones to create their own unique tunes on its phones.
But perhaps most notably, Motorola has been promoting music technologies within its mobile phones. Last month, the company introduced three new devices squarely aimed at the music devotee. The company’s E398 offers an integrated MP3 player, SanDisk’s T-Flash removable memory for storing music, three-dimensional stereo surround-sound speakers and an integrated digital camera. Its E680 features 3D stereo surround-sound speakers as well as RealPlayer software, support for removable memory cards, Bluetooth, 3D graphics, MIDI background music and MP3 sound effects, and its C650 offers MP3 ring tones, an integrated digital camera, MPEG4 video playback, downloadable Java games and multimedia messaging. Other new Motorola devices also feature support for MP3 ring tones and other music features.
Naturally, Motorola isn’t the only mobile-phone manufacturer to research the union of wireless and music. Samsung has installed MP3 players into several of its advanced camera phones, and Samsung executives have pointed to music-capable devices as one of the company’s next major areas of focus. Nokia introduced its 3300 “music phone” last year, which supports MP3 tracks and FM radio. Nokia even released a special black version of the phone complete with rapper Jay-z’s “Black” album. And Siemens recently released its white-label digital music player, which allows users to download MP3 files over the air.
Nevertheless, Motorola said it plans to increase its focus on music in the coming months. Moriondo said the company will continue to work on music promotions through its deal with MTV and is working on alliances with the world’s top five record labels to offer “master tones,” or ring tones that sound like the original recording. In its mobile phones, Moriondo said Motorola will continue to support digital music formats, including MP3, AACplus and Microsoft Corp.’s Windows Media Audio format.
Moriondo pointed to Motorola chief Ed Zander’s recent CTIA Wireless presentation on seamless mobility as the company’s ultimate goal. He said users should have access to any music at any time from anywhere, and that Motorola products would play a role in that world. Indeed, the future may be nearer than some expect, as Moriondo promised that Motorola phones next year will be able to store up to 1,000 different songs. Moriondo declined to offer details or specific sales expectations.
Despite such optimism, Moriondo admitted there are plenty of challenges. Digital rights management and copyright protection is one of the key aspects of the digital music business, and so far, there is no clean way to transfer music files from one appliance to another, such as from a mobile phone to a home stereo system. The reason behind such challenges-opposing DRM standards-is an issue that likely will take years to work out. Further, there is no standard method today to distribute music over wireless networks, which is a key component for the ultimate success of Motorola’s music plans. However, Motorola executives hint that the company is working on the issue and could engage other players as well as Motorola’s 4thpass content distribution business to aid in the effort.
“There’s definitely thoughts on it,” Moriondo said. “We’re talking to a number of operators about it.”
“We’re in the early stages of establishing an ecosystem,” Motorola’s Woods said.
Moriondo did say that Motorola has no plans to develop its own digital music service like Apple Corp.’s iTunes and emphasized that the company “is not about content aggregation but about value-added services.”
“We try to be very flexible to accommodate our operator partners,” Moriondo said.
