The company basically looked like it was gonna die any day. Then RAZR happened. The swaths of incompetents had no idea how to leverage the success, but oh man they were able to spend great swathes of money on terrible ideas over the next few years.
Probably the pinnacle of this incompetency was collaborating with Steve Jobs on the first iTunes enabled phone (ROKR). Basically Moto management opened the doors to Apple/Jobs on how to build cell phones - gave full access to Apple's engineering teams with virtually no upside for Moto but lots for Apple.
RORK was a dud. Then iPhone came out a couple years later. I still remember the COO/CEOs downplaying it in town halls, saying things like "Where's the keyboard! No one is ever going to use a touch screen based device!". Of course, all the engineers knew the writing was on the wall - the iPhone was amazing.