01/23/2008, 8:15am, EST
Wednesday, January 23rdMotorola cellphone sales tumble 38 percent
Motorola's mobile device business took one of its most serious drops in recent memory, the company announced today as part of its quarterly results. The group, which primarily covers cellphones, saw its sales drop in the fiscal fourth quarter by 38 percent compared to the same period a year ago. The shortfall resulted in a $388 million loss versus a $341 million profit at the same point in 2006 and saw shipments of 40.9 million cellphones over the three-month span. Although additional segments such as set-top boxes and business devices fared well, the impact of the cellular business contributed to reduced earnings of 5 cents per share, or $100 million.
The drop came despite introducing phones such as the MOTO U9 (pictured), a premium version of the RAZR2, and multiple phones in the company's W-series "world" handsets, the company says. No explanation is given for the drop itself, though chief executive Greg Brown states that returning the cellphone business to health will be difficult and has already required some unspecified "cost actions" to complete.
"The recovery in Mobile Devices will take longer than expected and there is a lot more work to be done," he says. "Our primary focus is on improving profitability and enhancing our product portfolio in this business."
The company expects a loss of between 5 and 7 cents per share in the first quarter of 2008.
Motorola has increasingly struggled to compete in both feature-limited phones and smartphones in recent months, trading share to companies such as Samsung for simpler devices. The company has often been one of the most popular for such phones in the US but is more frequently being considered a smaller player in the country's smartphone business, ranking significantly behind RIM and Apple in recent marketshare statistics.
Filed under: Investor, industry, Apple
Other story tags: Motorola, RIM
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A few years back I switch from a Nokia (the phone was dying) to the ever popular RAZR. The phone looked cool, but the interface was unusable. I was embarrassed for motorola. I was wondering when they'd eventually loose their shirts to better phones, when people finally picked function over style.