You got to know when to hold 'em, know when to fold 'em, Know when to walk away and know when to run.
Motorola knows. For a corporation that has struggled to adapt to the rapidly changing communications market, the Shaumburg, Ill., giant is finally playing its hand with vigor and decisiveness.
Just weeks after announcing it would spin off its multibillion-dollar semiconductor business, Motorola confirmed that its chip group completed a long-awaited mobile communications architecture to take on the likes of Intel and TI. That was quickly followed by word the company is a quarter ahead of schedule fielding its magnetoresistive RAM, a nonvolatile storage technology that many expect will begin to give flash memory a run.
Then, amid what may be the biggest strategic makeover in its 75-year history, Motorola dropped a bomb at the recent National Electronic Distributors Association conference when it disclosed it was removing its contract manufacturers from supplier pricing negotiations (www.ebnonline.com/showArticle.jhtml?articleID=16000660).
Motorola is not the first large electronics company to have adopted a so-called price masking policy, and at $17 billion its annual procurement spend is certainly large enough to justify the move. What was surprising, even refreshing, was the public nature of Motorola's policy change, which it shared with a room full of component suppliers and distributors.
Was this an historic move? For Motorola, certainly. By openly setting out its new buy/sell program, the company would appear to be pressuring cell phone rivals Nokia, Samsung, and Sony-Ericsson to follow suit or at least take pains to more clearly articulate their procurement policies to suppliers. Loyalty is a frequently used term in the electronics industry, but it often rings hollow. Motorola's decision to begin dealing directly with vendors could give it an advantage in the months ahead.
Whether the new program will have a broader effect on industry remains to be seen. Only a few of the largest OEMs interviewed by EBN in the past week confirmed that they, too, use price masking, so it's difficult to know whether Motorola is blazing a new trail. Smaller OEMs, on the other hand, lack Motorola's purchasing power and frequently are better served by asking their contract manufacturers to represent them during supplier price negotiations.
It's also hard to say whether Motorola's new policy will affect EMS providers in a broader sense. Many have access to online services that track component pricing and analyze bill of materials costs. And if other OEMs in Motorola's space refuse to mask prices, EMS companies will have at least a pair of tools to help them monitor ASP fluctuations.
Of course, such speculation may be reading too much into Motorola's intentions and influence. But isn't that the purpose of a poker face?
E-mail comments to Andrew MacLellan at firstname.lastname@example.org.