Motorola launches new image

PUBLISHED : Sunday, 14 January, 1996, 12:00am
UPDATED : Sunday, 14 January, 1996, 12:00am

GLOBAL communications giant Motorola has not had a good week.

On Wall Street, investors frantically punched the buttons on their Motorola portable phones and told their brokers to dump the stock, after it announced earnings had plunged 16 per cent in the fourth quarter.

In Boynton Beach, Florida, 1,200 Motorola employees also picked up their portables and called home with the news that they had been offered voluntary redundancy packages.

All this from a company that was supposed to be riding the great communications boom of the 1990s into the 21st century.

In Hong Kong, plans are afoot to straighten things out.

In a nutshell, Motorola is shifting its business philosophy from that of a manufacturer to that of a marketer - and Hong Kong is to be the testing ground.

As it is in the business of consumer electronics, it has decided it is to spend as much time on the consumer in the future as it did on electronics in the past.

Its first attempt at this was not a total success. Pamela Thompson, managing director of Motorola AirCommunications in Hong Kong, cast her mind back to some of the company's original advertisements.

They featured heavy, black products being dropped from buildings or dipped in acid - and still working.

The campaign was fundamentally flawed. When it came to new technology, consumers wanted the equivalent of Giorgio Armani.

That is exactly what Motorola had. The trouble was it was presenting it as rubber boots.

It was time for a rethink.

'We had the technology, and we had to figure out how to sell it to businesses and consumers.

'These competencies did not exist within Motorola.

'We have just begun to realise the importance of marketing and advertising,' Ms Thompson said.

That is an extraordinary admission for a company that sold $7.2 billion worth of goods in 1995.

In an attempt to increase these 'competencies', Motorola has come to Hong Kong with a new product - virtually a new industry - and is to mass-market it here.

The product is AirCommunications, and it basically involves wireless communications.

This means you can receive and send information such as faxes and E-mail from your lap top or palm top from wherever you happen to be.

This may be a minor business now, but indications are it will increase rapidly in importance - perhaps holding one of the keys to Motorola's successful expansion.

For example, use of cellular phones is on the wane and sales are slowing. In addition, existing users of portables are using them less and less, while the competition in the market is increasing in both number and sophistication.

AirCommunications represents the next stage in product development, taking the mobile communications ethos one stage further.

If Motorola is to grow successfully and maintain earnings streams, it is going to have to market these services very effectively to the global market.

As such, its operations in Hong Kong offer an interesting glimpse into how Motorola will be presenting itself and its products to consumers in the future.

Look at what it does in Hong Kong and you will see what it may be doing around the world. The first thing to note is that when Motorola looks at Hong Kong it sees the consumers of the future.

So who is this 'new consumer'? The answer is a slightly frightening vision of an urban dweller, pushed for time, snatching an extra half hour's work in the taxi, technologically literate, whacking out wireless communications to all and sundry and receiving electronic messages in return.

He - or she - has a portable phone, a palm top computer and the software that allows them to be unplugged but still in contact.

Seeing that Hong Kong is already wise to the idea of portable phones, it provides a useful testing ground for assessing how consumers will react to the spread of wireless communications.

'There has been so much hype about new technology in the United States that it has got in the way of progress,' Ms Thompson said.

'Consumers there have taken a wait-and-see attitude.

'I think people here see through the hype. They either smell a nickel or they don't bother.

'In the US, people are not so profit-oriented as they are here. They cannot smell a nickel.

'So we intentionally picked Hong Kong for this business.' Motorola's marketing efforts in the territory demonstrate effectively the company's global aim of making itself more easily accessible to the consumer.

It has been very much a back-to-basics exercise concentrating on simple advertisements, a large number of distribution outlets, simple explanatory leaflets and well-trained salespeople.

This is hardly radical stuff, but it represents a notable shift in direction for Motorola.

Its pagers are now multi-coloured rather than dour black.

It has targeted the services on offer to match the needs of the consumer, such as offering wireless betting through the Jockey Club, wireless access to financial information and wireless access to local and international news.

Is it working? Ms Thompson would not discuss exact figures.

She will only say that in five years' time there should be about 130,000 people using wireless communications in Hong Kong, and Motorola should have about half of that market.

That is not a huge number, but, as Ms Thompson pointed out, creating a new industry takes time as well as effort. What is more interesting is Motorola's attempt to use Hong Kong as a microcosm in which to test its plans for the future.

The fall in earnings and the voluntary redundancies indicate the company is in need of change, while the decline in portable phone use indicates that change had better be quick.

Investors may be able to assess the medium to long-term prospects of this quintessential technology stock by its success or failure in the territo-ry.

'If it works in Hong Kong,' Ms Thompson said, 'we will roll it out around the world.' If it does not work, more investors will be calling their brokers with sell orders and more staff members will be calling home with news they could be out of a job.

For Motorola, these are interesting and formative times.