1_What_Salient_Opportunities_and_Threats_Exist_in_Motorola's_External_Environment_

OPPORTUNITIES 1. Fast Growing in Wireless Communication The projected number of wireless phone users worldwide by year 2002 will exceed 1 billion. [6] Wireless communication provides a convenient solution for communication, cheaper solution for underdeveloped area as it saves cost of cabling and pole. The third generation of wireless communication will not only comprise of voice transmission, but also data transmission. 2. International Growth Opportunities The world's last and largest marketplace -- China, is opening up her market to foreigner. Under WTO agreement, China will remove the restriction on foreign investors in the area of wireless communication. Also, tariff will be reduced or remove for imported goods. 2. Lower Manufacturing Cost in Asia Pacific The labor cost in Asia is relatively cheaper than in US and Europe. Taiwan, Singapore, and Malaysia can provide high technology labor force with lower labor cost. On the other hand, the number of manufacturing subcontractor and foundries for electronics industry is increasing in Asia region. The foundries can take the low-end assembly process to high-end wafer fabrication in a cost effective manner. 3. Increasing Demand on Intelligent Smart Chip When the armed house is being broken in by thief, the security system will not only trigger the alarm, but also make phone call to owner's cellular phone and community police station. The advance electronics features require more sophisticated electronics control system. The estimated number of smart chips to be sold globally in next 5 years is 50 billion. 5. New Electronics Control System Embedded with Car The annual worldwide demand projected for automotive electronics by 2002 will be US$ 26.5 billion. The embedded electronics system includes fuel injection controller, car alarm, Global Positioning System (GPS), etc. 6. Advance TV Services and Home Networking Estimated US cable industry revenue by 2005 through deployment of digital cable, high speed internet, and telephone via broadband will be US$ 80 billion. THREATS 1 Rapid Technology Cycle Wireless technology change every 5 years, semiconductor technology change every month. According to Moore's law, the speed of microprocessor doubled every 18 months. The electronics industry is the rapid changing industry. If company cannot catch up with technology change, it will be left behind. 2 New Entrants in Wireless Communication Industry Five years ago there are only Motorola, Ericsson, and Nokia in cellular phone market. Nowadays, Sony, Alcatel, Panasonic are entering the cellular phone market. More and more new entrants are becoming key player in the industry because its prospect and profit margin. 3 Competition from Competitors Most products can be substitute with another product with similar functionality and features, especially general function product like cellular phone from competitors. Competitors are moving aggressively to gain market share, too. 4 Changing of Customers' Needs Demands of customers always changes due to the environment change. Customers change their requirement because of new technology and feature-rich products offered by other vendors.