Motorola Challenges Intel in Personal Computer Market

Strategic Insights -

Motorola Inc. is making a bold move into the personal computer market, vowing to become the low-cost choice for businesses and take a significant chunk out of Intel Corp.'s market share. Motorola's goal is to build market share for the PowerPC microprocessor technology, which it developed with Apple Computer Inc. and International Business Machines Corp. at the expense of Intel. With its PowerStack line of personal computers and servers, Motorola aims to double its PC market share every year for three years and price its products below the most powerful Intel-based systems.

Key Takeaways:

  • Motorola plans to unveil its PowerStack line of personal computers and servers and launch a marketing campaign to position itself as a low-cost, mass market producer.
  • The company's goal is to double its PC market share every year for three years and price its products below the most powerful Intel-based systems.
  • Motorola produces its own central processing chips, making it possible to offer lower prices without compromising quality.
  • The company's success may be hindered by the lack of widely used software for the PowerPC platform, but it may also drive the development of new operating systems and applications.
  • Motorola's move into the PC market may also benefit Apple's PowerMacintosh computers, as the two companies share a common technology platform.
  • The low-margin PC industry is already seeing single-digit profit margins, and the entry of a new, well-funded competitor like Motorola may make it even tougher for existing players.
  • Motorola's presence in the PC market may be especially challenging for Apple and IBM, which are both partners in the PowerPC technology and significant customers for Motorola.
  • IBM is introducing a new PowerPC-based AS-400 server and adding new PowerPC-based workstations to its product line, which may help the company expand its use of the PowerPC chip.

Statistics:

  • Intel Corp. dominates the PC central processor market with nearly 90 per cent of all PCs running on Intel chips. (Source: Intel Corp.)
  • Motorola aims to double its PC market share every year for three years. (Source: Motorola Inc.)
  • Motorola's revenue in 1993 was $17 billion (U.S.) and over $10 billion in the first half of 1994. (Source: Fortune magazine)
  • Motorola is the 23rd-largest U.S. industrial company, according to Fortune magazine. (Source: Fortune magazine)
  • Among PC makers, only IBM is larger than Motorola, and the other major players (Apple, Compaq Computer Corp., Dell Computer Corp., Packard Bell Electronics Inc.) are a fraction of Motorola's size.

Sources:

  • "Intel Corp." (Source: Intel Corp.)
  • "Motorola Inc." (Source: Motorola Inc.)
  • "Fortune magazine" (Source: Fortune magazine)
  • "BIS Strategic Decisions Inc." (Source: BIS Strategic Decisions Inc.)
  • "Annenx Research Ltd." (Source: Annex Research Ltd.)
  • "Simon/Ross+Associates Inc." (Source: Simon/Ross+Associates Inc.)
  • "Cupertino, California" (Source: Apple Computer Inc.)
  • "Armonk, New York" (Source: International Business Machines Corp.)
  • "Phoenix" (Source: Annex Research Ltd.)