updated 12:00 pm EST, Tue January 29, 2008
Motorola May Exit Cell Biz
Motorola may be looking to fold its cellphone business after years of struggling to restore the business to profit, says an investor note from Nomura analyst Richard Windsor. After a damaging quarter that saw Motorola's cellphone sales suffer a 38 percent drop, the company is said to be considering closing the division entirely to stem losses. This would leave the remaining divisions to focus chiefly on government and large-scale business sales, Windsor says. Notably, Motorola would still appear in the mainstream market through its technologies, which include WiMAX handheld chipsets and mobile TV devices.
The Nomura researcher does not say how quickly he would expect Motorola to phase out its cellphone offerings or whether this would extend to add-ons, which also include peripherals such as Bluetooth headsets and speakerphones.
Motorola is one of the few major worldwide cellphone manufacturers to be losing marketshare. In 2007, the company's overall share dropped from 23 percent of the market to just 13 percent, most of which went to its immediate rivals. Nokia in particular owns 40 percent of the entire market while Sony-Ericsson and Samsung have also been making progress in the market.
The news comes as Motorola's smartphones are said to be eating at HTC's marketshare and providing the company with gains in the relatively small but growing Windows Mobile phone business.