Motorola warns investors of ‘rocky’ road ahead

“Motorola warned Wednesday that investors shouldn’t expect an exceptionally speedy recovery from the struggling handset maker,” Scott Moritz reports for TheStreet.com.

Moritz reports, “Finance chief Dave Devonshire told investors at a Bank of America technology conference in New York that the next two quarters ‘will be rocky.’ Asked to explain, Devonshire said, ‘It’s not going to be good, but it’s not a terminal illness.'”

“Investors didn’t come away feeling more confident about the pace of Motorola’s rebound. ‘If it’s going to take 18 months, I don’t know if I want to wait,’ said one money manager at the conference,” Moritz reports.

Moritz reports, “The news comes just a month after Motorola reported its third straight disappointing quarter and warned of soft numbers ahead. CEO Ed Zander responded by promising to cut 3,500 jobs but urged patience on the Schaumburg, Ill., wireless giant’s fourth-quarter conference call.”

“And with Motorola preparing no potential blockbuster phones for introduction anytime soon, industry observers fear Apple’s iPhone will soon take a big slice of the U.S. business,” Moritz reports. “‘It doesn’t look good,’ said the money manager. ‘You have the iPhone coming later this year and that could take some of the high-end business. It will make things even more challenging.'”

Full article here.

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17 Comments

  1. Motorola can blame themselves for beginning the downfall. 23 versions of the RAZR and selling them for 20 bucks or free cant be profitable.

    MDN Word: days, as in , remember the days when the RAZR was cool and 500 bucks? Now the iPhone is 500 and pwns your soul

  2. It’s too bad about MOT- they had upwards of 180,000 employees worldwide right after they bought General Instruments, and last I heard, they were down to ~65,000. A whole lot of people lost their jobs, yet higher management continued to reap nice bonuses. The management of that company just can’t figure things out, it seems. During my time there, we went through so many re-orgs that employees basically stopped caring about anyone higher than their direct manager, since in a few weeks it was likely to change anyway.

    Their branding is all messed up, as the divisions in the company kept changing names.

    They outsource key portions of the company, and end up having far higher costs than if they kept the work in-house with accountable people. IT and design being key areas, though I witnessed this with a prototyping center (outside vendor costs increased by at least 50% when the vendors realized they no longer had to compete with an internal department for business).

    It’s really a shame. Maybe some good will come out of all this in that MOT will become a case study for future business students….

  3. Why would ‘industry observers’ fear the iPhone–isn’t innovation a good thing? I mean c’mon we all clammer & beg for great products–why would you fear a phone? If you (as an industry analyst) feel iPhone is going to make a big splash, why not get on the F’lng iPhone train instead of fearing it. Motorola is Motorola–there’s nothing new there–if they’re financially healthy & solvent, iPhone will actually help make them a stronger and more competitive because Apple’s done all the work for you..Motorola can simply copy it like everyone else

  4. I used to work with these buffoons. They couldn’t plan their way out of a paper bag.

    Look at how they botched Apple’s G3/G4 supply over the last decade.

    I feel sad for Motorola Corp., but they are reaping what they sowed.

    S

  5. My neighbor down the street works for Motorola and, no joke, she actually claimed before the MacWorld Expo that they knew exactly what Apple was up to. Essentially, she summed it up like this: “Oh, it’s obvious. We have already seen prototypes that Apple is working on. We know everything they’re doing. They’re going to come out with an iPod phone, that’s all.”

    Despite my internal demons telling me to shut up and smile, I couldn’t resist. My reaction was roughly this: “No offense, but Motorola doesn’t have a clue what Steve and Apple are up to. I’ve been following them closely for 10 years now and there is no way that Jobs would let anyone outside his close circle within Apple know what is going on. And you know what, if I were Motorola, I’d have Senior Management watching his keynote in January because all signs point to a revolutionary phone being introduced.”

    Of course, I’ve become the asshole neighbor now. Wisdom should have provoked me to just shut up. I guess I was weak that day. And not that it matters, but I was obviously right.

    Apple’s iPhone will completely obliterate the competition within 2 years. It is the single most innovative piece of hardware since the original Mac and unlike 1984, everyone gets it this time around.

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