Motorola an Oligopoly - ECN102 Midterm
5Motorola, an Oligopoly
The subject of my research paper is Motorola. I chose Motorola because my grandfather, Marion Pearce, worked there as an engineer in the sixties and seventies. Motorola is an electronics and telecommunications company. “Paul Galvin and his brother, Joseph, incorporated Motorola’s founding company — Galvin Manufacturing Corporation — in Chicago on September 25, 1928.” In 1930 Galvin Manufacturing Corporation introduced the Motorola car radio. “Linking ‘motor’ (for motorcar) with ‘ola’ (which implied sound). Thus the Motorola brand meant sound in motion.” Over the years they have released hundreds of products ranging from the Battery Eliminator to the razr+ 2024 smartphone. Motorola is an oligopoly, a market structure centered around a few very large firms producing similar products.
Our textbook defines an oligopoly as “a market dominated by a few large producers of a homogeneous or differentiated product.” Motorola would be the latter of the two, producing a differentiated set of products. In an oligopoly the barriers to entry make it very difficult and nearly impossible for new businesses to enter the market. With the economies of scale helping the handful of giants, smaller companies can not compete. Since the few large companies are all producing at scale they must find ways other than price to compete. Usually this takes place in the form of heavy advertising and brand loyalty.
In the early years of Motorola’s history it was on the cutting edge of technology. Starting with the car radio in 1930, Motorola then produced the Handie-Talkie in 1940. A two way portable radio which would be improved and mass produced for the US Army starting the following year. In 1947 they released the affordable Golden View television. As well as officially changing their name from the Galvin Manufacturing Corporation to Motorola the same year. In 1956 they developed their first transistorized remote-control TV. In 1973 they showcased the first public demonstration of the DynaTAC cellular phone. The rest is history over the next fifty years, coming leaps and bounds. Sending radio transmission from the Dimension IV and Voyager I space crafts in 1977. The world's first dual mode cell phone in 1991. Their first 3G cell phone in 2002. All the way to the tiny supercomputers we carry around today. Motorola is technology in motion.
Evidence that Motorola is an oligopoly would be that it has few competitors. Other large telecommunications companies include Apple, Samsung, and Google. With Apple holding nearly 58% of the market, Samsung holding 23%, with Google and Motorola holding 4% each. Given that a vast majority of the market is controlled by two companies, even well established companies like Motorola struggle to maintain their market share. (However, I will save my rant about Apple trying to be a monopoly for another time.) Despite only a few companies producing these goods they strive to stand apart. The classic M insignia (or “emsignia”) we recognize as the Motorola logo helps consumers to recognize their products at a glance. Their history of innovation continues to offer the best products possible even now.
In recent news Motorola has partnered with Google Cloud to bring Generative AI to the razr line of smartphones. About this Dan Dery (Motorola’s Software Experiences and Internet Services Leader) said, “The razr brand is synonymous with innovation, and we are thrilled to have partnered with Google to deliver innovative generative AI solutions to our consumers. … Moto ai empowers users to intuitively create content, personalize their device, obtain the information they seek, and accomplish more in less time – all made possible by Google's most advanced AI." This partnership is a clear example of motorola working to make their products stand out from their competitors. Even though it is a shared resource with Google it helps Motorola to compete with Apple’s AI assistant Siri.
In conclusion, Motorola's legacy as a technology innovator and its position within an oligopolistic market structure highlights its enduring influence in the telecommunications industry. Oligopolies often drive innovation, as companies like Motorola are pushed to develop cutting-edge technologies to gain a competitive edge without relying solely on price. With a history rooted in groundbreaking products like the car radio and the Handie-Talkie, Motorola has continually evolved to meet modern consumer demands. Despite facing stiff competition from dominant players like Apple and Samsung, Motorola leverages its rich history of innovation, brand recognition, and strategic partnerships—such as its recent collaboration with Google Cloud—to remain competitive. By consistently pushing the boundaries of technology, Motorola continues to embody its original mission of technology in motion.