Current event Report: Motorola

Essay by Leighh1000University, Master's February 2006

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The article that I chose was from the Wall Street Journal that discussed Motorola's planning to launch a system that will allow people to use their cell phones as credit cards. Motorola claims that you will be able to purchase products by simply waving your cell phone over a scanner at the cash register. Motorola is hoping that in the future that this service will play the same role as a credit card. Motorola's strategy is the latest effort for the wireless industry to come up with new sources of revenue to make up for the falling calling rates and market saturation.

Motorola will have to deal with some obstacles. First, they will have to cut a deal with a wireless carrier that is in favor of this new system. Once a carrier is established, people will be able to download the service that will be known as M-Wallet, from the company website.

M-Wallet is designed to work on a range of devices, including Palm Pilots and other phones that are not made by Motorola. Another obstacle Motorola has to deal with is getting retailers to participate and invest in upgrading their checkout scanners to communicate with phones equipped with embedded chips.

Motorola says that the service will have four layers of security that it hopes will give consumers enough confidence to store sensitive information. The system will also be able to turn itself off periodically after periods of disuse, providing some protection in case a user forgets to exit from the system.

Motorola's strategy is hoping that this new system will attract new consumers and gain more revenue to make up for the loss of revenue due to falling calling rates.