Motorola just doesn’t get it. Constant innovation isn’t their thing. They do well, and then stop innovating and fail again until it starts (or not!) back again.

I’ve just been made aware that Motorola will be closing their Montreal-based Research and Development Center as part of a worldwide mobile handset division restructuring. Not only are they closing their R&D here in Montreal, but also one they have in Adelaide, Australia, and a major one at University of Illinois at Urbana-Champaign’s Research Park.

You know Motorola (or any company) is doing badly when they have to lay off people and close off some of their business, but what you also know is that Motorola is doing VERY badly when they are laying off their R&D workforce, the founding roots of innovation > new products > sales > money.

Everyone was praising them when they released the RAZR, for its innovative sleekness. It sold out like crazy and took Motorola’s handset division out of its slumber. But did they think they could live from the RAZR – and all of its variants part of the LETRZ branding – forever?

History only repeats itself: Motorola did the same thing when they released the then revolutionary StarTAC – the world’s first true clamshell cell phone – in 1996. It was a tremendous success. Motorola then virtually stopped innovating, and plunged (until the arrival of the RAZR 7 years later).

The reason I think Motorola still has the second largest mobile phone market share (after Nokia and before Samsung and Sony Ericsson) mainly comes from the fact that they focused on low-end phones, the kind given for free with a mobile operator contract.

Maybe I’m wrong. I believe you need to be a pretty talented engineer to work at Motorola. If that is the case, it’s a management problem. Lack of creative freedom, ideas drowning in the Motorola ocean.

About 200 people are to be laid off from Motorola Montreal’s closing. In other news, Ericsson announced last week that their Montreal R&D center is looking forward to augment its workforce by exactly 200…

In the meantime, you can check out those other handset manufacturers who are actually profitable (there are less than you might think) such as Scandinavian pioneers Nokia and Sony Ericsson (Ok, part Japanese too). Or OpenMoko.

Many factors contribute to the success of those companies. One of them I think is putting user interface design, ease of use and high usability as a top priority. This will constitute the focal point of part II of this series.

– Pierre Nick