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Motorola Phones Sales Crash 38 Per Cent

Gordon Kelly


Motorola Phones Sales Crash 38 Per Cent

I'd love to think my well known disdain for Motorola handsets has influenced the masses, but it's probably more of a happy co-incidence.

Motorola's Q4 2007 results are in today and they're BAD, like DISASTEROUSLY BAD. Net sales for the quarter were just $9.6bn with a full 2007 financial year figure of $36.6bn. That compares horrendously to the same quarter one year previously of $11.79bn and a full 2006 financial year of $42.8bn. Year on year it's a fall of more than 14 per cent and this is in market sectors which are amongst the fastest growing in the world.

Predictably, the root of all Motorola's trouble was its Mobile Devices segment where sales were $4.8bn, down an incredible 38 per cent compared to Q4 2006. In fact, so poor was the performance it actually turned in an operating loss of $388m compared to a profit of $341m during the same year-ago period. Motorola also lost its position as the world's second largest handset manufacturer to Samsung in August.

Tempering this collapse ever so slightly was news Motorola's Home and Networks Mobility segment and Enterprise Mobility Solutions segment were up 11 per cent and 35 per cent respectively - though they make up less than 50 per cent of its total business.

"We are focused on aggressively rationalizing the company's cost structure and working to get Mobile Devices back on track," said Motorola CEO Greg Brown, putting on the bravest of faces. "The recovery in Mobile Devices will take longer than expected and there is a lot more work to be done. Our primary focus is on improving profitability and enhancing our product portfolio in this business. At the same time, we are very pleased with the continued strong performance of our Home and Networks Mobility and Enterprise Mobility Solutions businesses."

One word: 'RAZR'. It was Motorola's saviour and over reliance means it has also become the design which has hung the company out to dry. Standing still is not an option in the technology industry fellas... are we learning yet?

Update: As you might expect shares have now plummeted in Motorola, falling by 15.9 per cent to a new four year low of $10.36. Oh dear. On the bright side, it did fire its CEO recently.


Press Release (Warning: it's carnage)

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