Uncommon Wisdom

Jul 20 2010   11:36AM GMT

NSN’s Motorola wireless deal helps but still lacks service-layer strategy

Tom Nolle Tom Nolle Profile: Tom Nolle

NSN has officially started the process of acquiring the wireless networking assets of Motorola. The deal includes all of the base station and femtocell technology but doesn’t include handsets or any of the wireline and cable products that Motorola also provides.

The deal will give NSN a position in North America (which it hoped to get by picking up some of the Nortel assets, but failed to acquire at that time) and in Japan, but it doesn’t necessarily give the company everything it needs. Our research says that neither Motorola nor NSN are highly regarded as strategic partners. In fact, NSN was better positioned than Motorola until 2009/2010.

But with this deal, NSN will get not only market access but also some CDMA assets to help with the transition to LTE, as well as WiMAX assets. NSN is connected to the evolution of some of the world’s greatest wireless markets. What it needs now is a stronger connection to what those markets are evolving to.

We think there’s good stuff here to leverage, but we also think that the deal will expose NSN’s greatest weakness, which is the articulation of an effective and strategically relevant message. Getting the ear of the customer works best if you’ve got something to say. In our recent survey, NSN lost the most ground of the major players, and we attribute this to the fact that the company has failed to create good service-layer engagement. Its strategic credibility in the service layer suffered the largest drop of any vendor in our survey, not only in the current cycle but in the history of the survey. And strategic credibility is a leading indicator of future sales and market share.

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