Motorola sees mobile losses

 

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Posted on 24 Jan 2008 at 08:59

Motorola says that it will make a loss in the current quarter, as its mobile phone business is taking longer than expected to turn around.

Motorola's weak mobile phone product line caused it to lose customers to rivals like Nokia and Samsung last year, and it warned of further market share losses this quarter, backing off its forecast for its mobile devices division to return to profitability in 2008.

The news has dashed investor's hopes for a profit and sent Motorola shares tumbling as much as 23 percent.

"The figures had us scratching our heads, checking the date to see if we were looking at an earnings release from 2002," says JPMorgan analyst, Ehud Gelblum, in a note to clients.

Motorola chief executive, Greg Brown, forecasts a "significant drop" in first-quarter phone revenue and says unit sales will fall more than the decline of 10 percent to 15 percent typically seen in the first quarter.

Brown claims a plan to use chips from Qualcomm in new high-speed wireless phones later this year is the start of a plan to turn things around at the company.

"That decision will allow us a more competitive and robust portfolio in 2009," he says.

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Author: Reuters