|
Get the ICT news from C114 delivered to your inbox everyday.
1 TD-SCDMA 5 Huawei 6 ZTE 7 Ericsson 10 Nortel 11 Nokia 12 Blackberry 13 Android 14 LTE 15 ASB 16 UTStarcom 17 MediaTek 18 WiFi 19 WCDMA 20 CDMA |
Motorola May Be No. 4 in Mobile Phones After Losing Share to LG
Updated:2008/7/30 15:21
Motorola Inc., the world's biggest mobile-phone maker 10 years ago, probably fell to fourth last quarter as it lost more market share to LG Electronics Inc. Motorola tomorrow may say sales fell 26 percent to 26.1 million phones in the period, according to the average estimate of six analysts surveyed by Bloomberg. Nokia Oyj and Samsung Electronics Co. already have passed Motorola, and LG last week said shipments rose 45 percent to 27.7 million in the quarter. Motorola's slide to No. 4 comes as much as six months sooner than analysts predicted, and calls into question the viability of Chief Executive Officer Greg Brown's plan to split off the money- losing phone unit. Motorola has yet to unveil a touch-screen phone in the U.S. to compete with LG's Voyager or Apple Inc.'s iPhone. ``I expected Samsung to pass them, but I didn't think LG would pass them as well,'' said Pablo Perez-Fernandez, an analyst at Global Crown Capital LLC in San Francisco. ``The decline was much worse than I thought.'' Perez-Fernandez, who rates the shares ``neutral,'' puts Motorola's market share at 8.5 percent and LG's at 9.1 percent. Two years ago, Motorola had about 22 percent. Researchers at Strategy Analytics in Boston had projected in May that Motorola would fall behind LG by the end of the year. Motorola, based in Schaumburg, Illinois, may also report that its net loss widened in the quarter to $76.1 million, or 4 cents a share, from $28 million, or 1 cent, a year earlier, according to a Bloomberg survey of 15 analysts. They estimate sales slid 11 percent to $7.7 billion, the sixth quarterly drop in a row. The company is scheduled to report its earnings before U.S. exchanges open tomorrow. More Losses Motorola, No. 2 as recently as last year, may see further declines in its ranking. No. 5 Sony Ericsson Mobile Communications Ltd. in London is closing in, having shipped 24.4 million units last quarter. Second-ranked Samsung, based in Suwon, South Korea, moved 45.7 million, and industry leader Nokia, based in Espoo, Finland, shipped 122 million. ``We've seen more share loss and shelf space loss for Motorola,'' said Michael Walkley, an analyst at Piper Jaffray & Co. in Minneapolis with a ``sell'' rating for the stock. ``They're closer to being No. 5 than No. 2.'' Motorola rose 43 cents to $7.51 yesterday on the New York Stock Exchange and has lost 53 percent this year. Five analysts recommend selling the stock, eight say buy and 19 advise holding it, according to data compiled by Bloomberg. Seoul-based LG has advanced 1.5 percent this year on the Korea Exchange. Split Looms Brown, 47, said in March he will shed the phone unit to focus on profitable set-top boxes, radios and networking gear. Motorola hasn't had a hit handset since the Razr flip-phone in 2004, and the mobile business has lost more than $1.6 billion since the start of 2007, prompting more than 9,000 job cuts. The company is making progress with the plan to break off the phone division, Motorola spokeswoman Jennifer Erickson said. This week, Motorola said it will divide its set-top box and networks division into three businesses. Erickson declined to comment on earnings or market share. Motorola won't be able to split off the phone unit until it's profitable, said Raimundo Archibold, an analyst at Kaufman Brothers LP in New York. That won't happen until some time next year, he said. `Mended' ``You'd need to have the business in the state of being mended,'' Archibold said. Otherwise, Motorola would need to spend some of its cash to keep the handset unit afloat, hurting the ``healthier'' divisions, he said. The company had $2.69 billion in cash and cash equivalents on March 29. If the handset unit hasn't returned to profit a year from now, Motorola will have to consider cutting its losses and closing the business, Archibold said. He recommends buying the stock, saying it's worth $10 without the phone division. He owns the shares. To turn a profit, Motorola must improve its phones, Archibold said. The latest models, including the Rokr E8 music phone and the Z9 with satellite navigation, are inferior to competing handsets in the same price range, he said. The phones cost $199.99 with a contract, the same as Cupertino, California- based Apple's iPhone. Apple started selling the iPhone in June 2007 and broke into the list of world's 10 biggest handset makers later that year. A version that debuted this month sold 1 million units in the first three days, leaving most Apple stores out of stock after 10 days. LG's Vu and Voyager, offered in the U.S. by AT&T Inc. and Verizon Wireless, have touch screens and can play video, emulating the iPhone. Samsung's touch-screen Instinct had the best first week of any new handset Sprint Nextel Corp. has sold, the carrier said last month. ``They've been more willing to take risks with hardware design, LG especially with touch screens,'' said Morgan Keegan & Co. analyst Tavis McCourt in Nashville, Tennessee. ``They both have just many, many more phones than Motorola has.''
Source:Bloomberg ,Motorola's New Smartphones: Sales, Not 'Dazzle' (2009-7-1) ,Verizon, T-Mobile to offer Motorola Android smartphones (2009-6-24) ,Motorola Executive Helped Spur Cellphone Revolution, Oversaw Ill-Fated Iridium Project (2009-6-22) ,Nokia, Motorola, Haier Bolster China's WAPI Standard (2009-6-17) ,Motorola to sell Soundbuzz; not to exit mobile biz in India (2009-6-10) ,Motorola: Shopping Wireless And Set-Top Box Units? (2009-6-8) ,Motorola to embedded 3G/4G modules for new kickstart (2009-6-4) ,HTC, Motorola, Samsung to bring G-phone (2009-6-4) ,Motorola clarifies position on WiMax, LTE R&D, focuses on TD-LTE (2009-6-2) ,DoCoMo picks Motorola for LBS deployment (2009-5-20) ,Motorola bags much needed contract (2009-5-18) ,Motorola clarifies position on WiMax, LTE R&D, focuses on TD-LTE (2009-5-18) ,China Mobile Clinches a USD310mn Deal with Motorola (2009-5-15) ,Motorola Wins $310 Million Contract In China (2009-5-15) ,Motorola Announces Frame Agreement with China Mobile (2009-5-14) ,Motorola Signs Frame Agreement With China Mobile (2009-5-14) ,Motorola investors vote for power to call meetings (2009-5-5) ,Motorola expected to report 1st-quarter results (2009-4-30) ,Rumor: Motorola readying first Android phone (2009-4-30) ,Unwired Fiji selects Motorola for WiMAX project (2009-4-29) |
Latest News
,RFS opens advanced manufacturing center in India ,Proven CELLFLEX Lite range now complete ,Petrobras chooses advanced RFS optical networks for optimized wireless coverage ,LG to focus on user-friendly cell phones: executive ,Nokia plots latest foray into North America ,Nokia, Samsung Lead Latest Greenpeace Green Electronics Survey ,LTE may be data-only, but still needs to support voice ,Is Twitter the news outlet for the 21st century? ,Vodafone pulls Google phone from NZ market Hot News Review
,CDMA subscriber base nearly half a billion ,ZTE & Huawei to replace Datang¨s TD-SCDMA kit in Guangzhou for China ,China Mobile Fast-Tracks TD-LTE ,China's Huawei needs makeover to win big markets ,China to ease restrictions on Wi-Fi enabled handsets ,China handset industry production declines more than 15% in 1Q09 ,Nokia unveils 11 new handsets for emerging 3G segment ,Nokia to launch Chinese-version Ovi Store in China in year-end 2009 ,China Mobile Swaps Out Datang 3G Kit ,Vestberg upbeat over Ericsson's top position |