Submitted by Yi-Wyn Yen02.03.2009
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Betting closes on Dec 15 2009
Motorola co-chief executive Sanjay Jha said the company is "completely committed to making the handset business work."
However, Motorola's financials suggest the opposite. The company posted a huge Q4 loss of $3.6 billion. Sales in its struggling cell phone division dropped 51% to $2.3 billion for the quarter with an operating loss of $595 million. Motorola's market share for mobile devices has dropped to 6.5%, half of what it was a year ago.
Motorola has been scaling back on its mobile devision. It says it will develop a device based on the Google Android operating system later this year. Analysts are skeptical that an Android-based Motorola handset will be enough to save the company. In this environment it will be extremely difficult for the Motorola to sell off its mobile phone business.
Prediction: Motorola announces by the end of 2009 that it will shut down its fading mobile devices division.
Current Community Consensus 12%
Prediction Statistics
| Betting Closes: | Dec 15 2009 | Current Consensus: | 11.92% | Total Bets: | 39 |
| Today's Change: | 0% | ||||
| Life Time High: | 50.00% | ||||
| Life Time Low: | 11.92% |
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Comments
Just to be clear... spin off or selling off the mobile division do not qualify as shutting down.
Correct. Shutting down means they just kill the division.
@Yi-Wyn, thanks for the clarification. IMO, there is an extremely small chance as Motorola makes a variety of cell phones for use worldwide (i.e. multitude of wireless technologies at different RF bands). Granted that Motorola entry on Android might be too late and subpar Windows Mobile devices, For example, Motorola is the primary manufacturer of iDEN devices with intimate knowledge of the iDEN infrastructure (they helped develop it). What about Iridium devices? Iridium is a spin-off from Motorola and has attempted to relaunch itself as an MSS provider. I can envision right-sizing, re-focus and financial realignment happening in the mobile division, spin-off or even a sale. Shutting down just seems to be rather extreme. Selling 19.2M devices in a single quarter (4Q09) is no small feat. Even Apple with the highly successful iPhone is nowhere close to that figure.
According to WSJ article
Co-Chief Executive Sanjay Jha replied the company is "absolutely committed" to reviving the business. Mr. Jha said he couldn't predict when the unit would break even but that it wouldn't happen in 2009. He expects Motorola's cellphone sales will fall faster than the market as it narrows its portfolio to focus on mid- and high-end phones.
Co-CEO Greg Brown said the company remains committed to a spin-off of the cellphone business at the "appropriate" time, but the scale of the unit's losses and the global recession will postpone any moves.
Check out TIS write-up on Motorola not quitting mobile business
Not only are they not shutting down the mobile division, they are still making new handsets for iDEN
10 new Motorola smartphones planned for 2H09
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