Motorola Powers Down

The rapid appearance of a glut on the market for LCD televisions and computer monitors claimed its latest victim on Monday. CNET reported that Motorola (NYSE: MOT  ) has terminated its deal with Moxell Technology, a division of Proview International, to co-develop and market a line of Motorola-branded LCD and plasma TV sets. The collaboration, had it gone forward, would have marked Motorola's re-entry into the consumer television market after decades of absence.

But it was not to be. Although sales were supposed to have begun a few months ago, the companies' plans to sell flat panel TVs in the U.S. and China never really got off the ground. There were a couple of hitches -- for one, the idea to sell flat panels in China. Motorola has good name recognition and a good reputation in the world's most populous country. Unfortunately, that's not always enough. Microsoft (Nasdaq: MSFT  ) has good name recognition, too, but that doesn't always translate into sales of its $300 operating system in countries such as China, Indonesia, or Russia, where the locals just can't afford to pony up that kind of cash. Now multiply that $300 figure by 10 times to get the price of an average-quality LCD television and you'll quickly realize the hurdle Motorola would have faced trying to sell flat panels in China.

The other hitch, as reported by CNN, was that Moxell's parent, Proview, wanted to piggyback on its subsidiary's deal with Motorola to sell some of the flat panels in the U.S. under its Proview brand name. For whatever reason, that didn't fit into Motorola's strategic plans, and reportedly contributed to the latter's decision to kill the deal.

In the end, after laying the groundwork for a multi-year collaborative effort, the furthest the companies actually got in their "alliance" was to manufacture a few LCD monitors for sale in the Chinese market. Those devices will now be liquidated and not replaced. Moxell, meanwhile, has decided to proceed with marketing Proview and MAG brand-name flat panels, manufactured by Proview, in Asia.

For more Foolish intelligence on doings in the LCD sector, read:

Fool contributorRich Smithowns no shares in any company mentioned in this article.


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