We all should know by now that the way a business makes money is by manufacturing a product at a low cost, then inflating the price by 200% and selling it to consumers. But Motorola doesn’t just want your money, it wants to cut costs on cheap mobile phones by $2 to $5 so that each phone they sell nets them an extra $2 to $5 per sale. Sad, but true. CEO Ed Zander has said, “We want to make sure our costs at the low end give us the profitability. It’s not just materials costs, it’s designing for costs.” Snap! But that’s not all Eddy has to say:
“We’re actually going to turn down some deals. I don’t know what it will mean for market share. I don’t really care in the short term,”
“Every time you fall off the horse like we did in (the fourth quarter), you don’t just end up doing the same stuff,” he said. “We’ve got to get discipline back that every product we make we make money on.”
So basically, Zander is flailing his arms like a retarded goose and praying for rain. Looks like it’s working though, as Motorola stock has climbed since the announcement. I understand cutting costs is one thing, but isn’t there a way where both the consumer and the manufacturer profit from it? If Motorola takes the money it saves from cutting costs and uses it towards fixing that crappy excuse for a UI on its phones, then consider me happy with the decision.