updated 08:25 am EST, Tue February 3, 2009
Moto Q4 2008 Results
Motorola on Tuesday reported further trouble for its recent fall quarter with both an immediate financial hit as well as ongoing drops in its phone shipments. The company says it posted a net loss of $3.6 billion during the three-month period ended in December and pins much of the responsibility on its Mobile Device group, whose losses ave only deepened year-over-year from $388 million in late 2007 to $595 million. Motorola blames drop on the economy and points to its 7,000 job cuts and a just-announced suspension of its usual cash dividend to shareholders as steps taken to rescue its business.
The mobile group's fall is directly attributable to poor cellphone shipments. Motorola notes it shipped just 19.2 million phones in the fall, which represents just 47 percent of the 40.9 million in late 2007. While no explanation is given for the shortfall, the company had only one smartphone introduction in the form of the Q 11 and considers only feature-limited, specialized phones as its highlights, including the $2,000 Aura, the Verizon-specific Krave and the Hint for Alltel.
Motorola estimates that it slid to 6.5 percent market share in the holidays, which is below recent estimates and, if accurate, will have fallen to fifth place in the cellphone market behind already struggling Sony Ericsson and the rapidly surging Korean firm LG. The decline was symbolized in the fall by the iPhone ousting the RAZR as the most popular phone in the US during the summer despite a much higher price point.
The company is nonetheless more positive about its future and notes that it generated positive cash flow of about $201 million helped by its other divisions. Mobile Devices is also claimed to be "on target" to launch a major revision of its devices in fall of this year, which most observers expect will include a major emphasis on Google Android that reduces the amount of Windows Mobile handsets.