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None of these products have proved to be an iPhone killer. That could be problematic for Motorola in the long run, especially if Apple breaks its exclusive contract with AT&T. The Crowd Science survey found that iPhone users account for 1 in 3 smart-phone owners. Among non-iPhone users, nearly 40% say they would switch to an iPhone for their next purchase. "Much of Droid's success has resulted from Verizon pushing it as its lead product," says Jefferies & Co. analyst William Choi. "What happens when Verizon can sell the iPhone?" (See 10 ways Twitter will change American...

Author: /time Magazine | Title: Motorola's Binary Code | 4/12/2010 | See Source »

...Motorola's focus on smart phones may limit its overseas growth. The high price tags of smart phones drive profit but not necessarily volume, particularly in emerging markets. And as part of its cost cutting, the firm is all but gone from most of Africa and the Middle East...

Author: /time Magazine | Title: Motorola's Binary Code | 4/12/2010 | See Source »

Strong brand recognition, though, will help Motorola recapture market share in Latin America, China and the U.S. Indeed, being a household name is one of the best competitive advantages Motorola retains, making its recent decision to manufacture phones branded with Google's name another questionable one. Already Motorola has had to pull Google from its phones being shipped to China after the search-engine company butted heads with the government in March. "That's O.K. for a less familiar brand like [Taiwan's] HTC," Gartner analyst Milanesi says. "But there is no value to Motorola in making phones for others...

Author: /time Magazine | Title: Motorola's Binary Code | 4/12/2010 | See Source »

Long term, Jha will need to consider Motorola's building its own operating software. For now, though, the first goal will be to restore stability to the beleaguered unit, especially as an independent company. One of the first steps will be to explore synergies with the TV-set-top business. "Right now, about 80% of the content people use comes to them in their home," Jha says. "But they increasingly need to carry that content on their cell phones. How can we make that easier...

Author: /time Magazine | Title: Motorola's Binary Code | 4/12/2010 | See Source »

Meanwhile, Brown's new spin-off will absorb Motorola's $3 billion in debt. But the split also means his charge will be able to keep the strong cash flow. "We will reinvest some of that money in expanded innovation, and we can consider ways to grow the firm organically or potentially through acquisitions," Brown says. "It will also be easier to attract world-class talent to a world-class firm rather than one in transition." Perhaps two heads will prove, after all, to be better than...

Author: /time Magazine | Title: Motorola's Binary Code | 4/12/2010 | See Source »

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