“In January, Motorola issued preliminary results showing it would post a fourth-quarter loss as well as lower sales than Wall Street expected. The company said it would cut an additional 4,000 jobs in response to shrinking demand for its wireless phones, a trend exacerbated by the sharp U.S. recession,” Bartash reports.
“The Schaumburg, Ill.-based company’s problems are well known. Its former flagship wireless division failed to find a replacement for the once wildly popular Razr phone and Motorola has lost ground to rivals Nokia Corp. and Samsung as well as industry newcomer Apple Inc.,” Bartash reports.
“In the past three months of 2008, Motorola shipped 19 million phones — well below Wall Street’s forecast.”
“Forced to slash its workforce and husband its cash reserves, Motorola faces daunting obstacles in its effort to recover. The deepening U.S. recession and strained relationships with major wireless-phone companies makes its task all the more difficult,” Bartash reports. “That’s why the company’s comments on the first quarter will be the center of focus for investors, though it’s unclear how much Motorola will reveal.”
Bartash reports, “Although Motorola does not provide handset estimates, the brokerage Global Crown Capital Research suggests first-quarter shipments could sink to 15 million. If the wireless business continues to shrink so rapidly, the firm said, Motorola could find itself in a no-win situation. ‘We find it likely that the mobile phone business can be neither rescued nor spun off, leaving Motorola in a difficult bind,’ analyst Tero Kuittinen wrote.”
Full article here.
In May 2007, Motorola’s then-Chairman and then-CEO Ed Zander boasted that his company was ready for competition from Apple’s iPhone, due out the following month. “How do you deal with that?” Zander was asked at the Software 2007 conference. Zander quickly retorted, “How do they deal with us?”
In November 2008, The NPD Group reported that Apple’s iPhone 3G had surpassed the Motorola RAZR as the leading handset purchased by adult consumers in the U.S. in the third quarter of 2008.
