Motorola's RAZR V3 sold 130M units — and the company forgot how to make another hit

The Motorola RAZR V3, launched in 2004, was the defining phone of the mid-2000s: an impossibly thin flip phone with a sleek metal design that became a fashion accessory and a status symbol. It sold over 130 million units, making it one of the best-selling phones in history.

But Motorola became complacent. The company continued to release minor variations of the RAZR (V3i, V3x, KRZR) instead of investing in a next-generation platform. When the iPhone launched in 2007, Motorola had no touchscreen smartphone to compete with. Its market share collapsed from over 20% to under 5% within two years.

Motorola's mobile division was sold to Google in 2012 for $12.5 billion (primarily for its patents), and later resold to Lenovo for $2.9 billion. The case illustrated how a single hit product can create a complacency trap: the success of the RAZR made Motorola believe it understood the market, when in fact it had gotten lucky with a design and failed to build the capability to repeat it.