Motorola Posts Wider Loss as Phone Shipments Decline

Motorola Inc. posted a wider loss and may lose more money this quarter than analysts estimated, hurt by a lack of new mobile phones to compete with Apple Inc. and Nokia Oyj.

The stock declined 3.1 percent after Motorola, the largest U.S. mobile-phone maker, said its first-quarter net loss expanded to $194 million, or 9 cents a share. Revenue fell to the lowest level in four years, trailing estimates.

Phone shipments plunged 40 percent as Motorola's Razr 2 and Z8 failed to keep buyers away from Apple's iPhone and a Nokia handset that has satellite-navigation. Chief Executive Officer Greg Brown, bowing to pressure from investor Carl Icahn, decided last month to spin off the handset unit to focus on TV set-top boxes, two-way radios and wireless-networking equipment.

``There's no part of this company that's really doing very well,'' Joan Lappin, president of Gramercy Capital Management in New York, said in an interview with Bloomberg Radio. ``This was a company with one of the great American brand names. There's just nothing special going on there any more.'' Lappin sold Motorola shares in 2006.

Sales growth in the non-phone businesses shrank in the quarter, showing that splitting off the phone unit may not help Motorola as much as Brown expects. Nomura International analyst Richard Windsor in London said those businesses may suffer this year amid a U.S. economic slump.

Motorola dropped 30 cents to $9.25 at 4:01 p.m. on the New York Stock Exchange. The Schaumburg, Illinois-based company has declined 42 percent this year.

Loss Forecast

The company forecast a second-quarter loss, excluding costs for job cuts, of 2 cents to 4 cents a share, falling short of analysts' projections for a break-even quarter.

First-quarter revenue declined 21 percent to $7.45 billion, trailing the $7.79 billion average of estimates compiled by Bloomberg. Shipments fell to 27.4 million units, compared with the 34 million estimate of Morgan Keegan & Co. analyst Tavis McCourt in Nashville, Tennessee.

``We knew it would be weak, but the degree of weakness in mobile phones was surprising,'' McCourt said. He advises investors to hang on to the shares.

Profit at the division that sells wireless-network equipment and set-top boxes also slumped, dropping 8.4 percent in the first quarter to $153 million. Sales advanced 2 percent to $2.4 billion, slower than the previous quarter's 11 percent pace.

Growth

Revenue growth at the unit selling two-way radios for police departments and emergency personnel, scanners for retailers, and network gear for businesses also slowed, to 5 percent from 35 percent in the previous quarter.

The mobile-phone division's loss widened to $418 million from $233 million a year earlier. The unit has lost more than $1.5 billion since the start of 2007 as consumers snapped up rival devices that play music, surf the Web and capture video. That prompted former chief Ed Zander to announce his resignation in November, leaving the company in Brown's hands.

Sales at the mobile-phone unit will be little changed or ``slightly up'' this quarter from the previous period, helped by new devices, Brown said on a conference call today. The loss at the unit will be similar to that of the first quarter. Sales at the other businesses will increase, he predicted.

``The overall trends for those businesses and their respective performances are pretty good,'' Brown said in an interview today. ``They are getting more and more of their growth internationally.''

Expenses

Excluding costs for 2,600 job cuts, the first-quarter loss was 5 cents a share, Motorola said. Analysts on average projected a loss of 6 cents, according to a Bloomberg survey. A year ago, the net loss was $181 million, or 8 cents, the company said today in a statement.

Zander revived Motorola with the Razr, only to see its cachet fade amid gains by Nokia, Apple and Samsung Electronics Co. The Razr 2, introduced last year, has failed to match the success of its predecessor, which sold more than 110 million units since its introduction in 2004.

Yesterday, Cupertino, California-based Apple reiterated plans to sell 10 million iPhones this year after selling almost 4 million last year. The device, which combines a Web-browsing mobile-phone with the iPod media player, went on sale in June.

Market Share

Motorola's handset market share shrank to 9.5 percent last quarter, with the biggest decline in North America, Brown said today. Motorola's share of global phone sales fell to 11.9 percent in the fourth quarter from 21.5 percent a year earlier, according to Stamford, Connecticut-based researcher Gartner Inc. Nokia boosted its share to 40.4 percent, and Samsung lifted its share to 13.4 percent.

To prevent Motorola from slipping further, Brown, 47, this month began selling the Z9 with satellite navigation. The company also started shipping the Rokr E8, which holds about 5,000 songs and includes a camera, Brown said today.

source : http://www.bloomberg.com/

Motorola Z9 slider phone, based on Razr platform

Motorola is now selling a new mobile phone with a sliding cover based on its popular Razr 2 mobile phone.

The Moto Z9 is Motorola's new mobile phone available to just U.S. buyers exclusively through AT&T Inc., which includes its AT&T Navigator GPS feature.

Paul Nicholson director of feature phone products group, based in Libertyville said "This will have a new keyboard and the slider features instead of the clamshell form factor of the Razr,".

Motorola, along with other industry giants, is in Las Vegas for whole week to show off new products at the CTIA Wireless trade show.

The Z9 is a new step in mobile phone direction, but Motorola needs a best variety of handsets, said Rick Franklin, telecom analyst.

"I'm not certain that this is enough of a breakthrough product to reverse the negative trends Motorola has recently experienced," Franklin said. "Additional product introductions will likely be needed to do that. Additionally, Motorola needs to improve its cost structure. Even at the height of Razr's popularity, Motorola's profitability lagged Nokia's."

The Z9 is Motorola's first 3G phone with Navigator. It has the CrystalTalk for clearer voice sound quality. Other features include AT&T Mobile Music, stereo Bluetooth wireless technology, up to 8 gigabytes of memory, with an optional removable card and a 2.0-megapixel camera.

Moto Z9 is being sold exclusively at AT&T and the price is $249.99 after a two-year service agreement.

The Moto Z9 was developed under Motorola's Mobile Devices business, which is expected to be spun off into a publicly traded company by next year.

Motorola unit on Videocon radar

Videocon hires top global banker to convey interest in handset biz.

The Videocon group has expressed interest in buying telecom giant Motorola’s struggling mobile handset business, which is being split into a separate company.

“We have hired one of the world’s top three investment bankers who will convey our interest to buy out the mobile handset business of the US company,” Group Chairman Venugopal Dhoot told Business Standard.

Explaining why he was bidding for Motorola’s handset business, Dhoot said his group was ready launch its pan-Indian GSM mobile operations at an investment of Rs 6,000 crore.

Also, it has a consumer durables retail chain under the brand name “Next” with over 1,000 stores across the country that stock mobile phones too.

“The Indian market for mobile phones is around 120 million units a year and we have our own retail chain stories that we can leverage. Also, we can transfer the manufacturing plant to India to leverage cheap labour in the country,” added Dhoot.

source : http://www.business-standard.com/

Motorola's first AWS RAZR - The Motorola MOTORZR V3s

Just how long can Motorola milk their RAZR brand? Well, they're going on 4 years now - ever since the MOTOROLA RAZR first revved-up the industry in 2004. We can't blame them for trying to wring as much revenue out of the RAZR's success, but the whole thing is starting to get a little tired at this point.

The FCC has revealed a new RAZR in the MOTORZR V3s. What's new? Well, the "A" in "RAZR" has been axed in favor of an all-consonant setup - RZR. But, more interesting is the MOTORZR V3s spec-sheet that indicates CDMA support on the AWS 1700Mhz frequency band (you know, the same AWS spectrum that T-Mobile USA is using for their 3G network). With a 800/1700/1900Mhz CDMA radio in tow, the RZR V3s is Motorola's first AWS-compatible handset.

Nothing much else is innovative about the "new" RZR handset, so go about your business. Just know that Motorola is seemingly on-board with AWS.

source : http://www.intomobile.com/

Global mobile phone sales increased by 16% in 2007 - Gartner

Worldwide sales of mobile phones to end-users surpassed 1,15bn units in 2007, a 16% increase from 2006 sales of 990,9m, according to Gartner. Mobile phone sales at the end of the year were consistent with the yearly trend, as fourth quarter sales reached 330m units.

"Emerging markets, especially China and India, provided much of the growth as many people bought their first phone," says Carolina Milanesi, research director for mobile devices at Gartner, based in Egham, UK. "In mature markets, such as Japan and Western Europe, consumers’ appetite for feature-laden phones was met with new models packed with TV tuners, global positioning satellite (GPS) functions, touch screens and high-resolution cameras."

"After another strong year, we expect the growth in sales of mobile devices to end-users will decelerate in 2008 and fall to about 10% growth as mature markets become more saturated," adds Milanesi. "However, the global mobile devices market will remain relatively immune to a recession in the US and Western European economies as the majority of growth in 2008 will come from emerging markets. The mature Western Europe and North America markets are driven by operator contract terms and replacement cycles and will account for just 30% of the global mobile devices market in 2008."

Nokia achieved its long-term target of 40% market share in the fourth quarter of 2007 when it sold slightly more than 133m phones across the world. Despite some component shortages, Nokia increased its market share sequentially in all regions except North America, which remains a challenging market for the vendor. In emerging markets, products such as the 1110, the 1600 and the 2630 were in demand by consumers, while in mature markets such as Western Europe high-end phones like the N95, N82 and N73 were sought-after devices. In 2008, Nokia will need to continue to improve its portfolio, offering not only more applications and functions, but also novel designs and improved user interfaces.

In the fourth quarter of 2007, Samsung maintained second position, and, although its market share slipped slightly, the gap widened between it and third-placed Motorola. Its success relied on its Ultra and Ultra II family of products. In 2008, Samsung needs to diversify its portfolio further with more form factors and colours so that single products stand out from the overall line-up.

The problems that beset Motorola in the third quarter of 2007 continued through the fourth quarter, and it recorded sales of 39m phones across the world, taking 11,9% of the market. It retained second place in terms of annual sales to end-users in 2007, largely thanks to the inventory it disposed of in the first half of the year. Nevertheless, the extent of Motorola’s troubles can be seen in the 9,7 percentage-points market-share drop in its fourth quarter of 2007 result from the same period in 2006.

Sony Ericsson ended 2007 with another positive performance, growing its market share on a quarterly basis to 9% from 8,7%. Its Cyber-shot and Walkman products, such as the K850i, K610i, W910i, K550i and W300i, remained popular among consumers around the world. As Sony Ericsson widens its reach, adding features such as Wi-Fi and GPS, as well as more low-tier products, it will stay competitive in the coming quarters.

LG’s mobile phone sales totalled 23,5m units in the fourth quarter of 2007, maintaining its 7,1% market share despite the increase of more than three million in sales volumes. The success of the Viewty, the Venus and the Voyager helped LG gain brand awareness across the world as well as improve its margins. Milanesi comments: "In 2008, LG will need to continue strengthening its high-end portfolio for mature markets as well as its mid tier. In the low tier, LG will increasingly be challenged by vendors such as ZTE, which has already been eroding its market share in key markets such as India."

The market saw three new entrants into the top ten in the fourth quarter of 2007. These vendors included Research In Motion (RIM), ZTE and Apple. "On one hand, we have aggressive pricing and a focus on emerging markets (ZTE), and on the other, RIM with targeted functions and Apple with brand and design," says Milanesi.

"Phone manufacturers need to continuously adapt their portfolios to respond to operators’ demands for open platforms, lower pricing and more personalisation," recommends Milanesi. "They should also try to meet consumers’ desires for fashionable, easy-to-use phones."

Source: http://www.computingsa.co.za/