Motorola execs plan innovative phones
CHICAGO — Motorola executives pledged Friday to break the company out of its deep slump by rolling out a series of innovative new cellphones rather than a "one-hit wonder" like the Razr.
They had no new products to unveil at the company's annual analyst meeting in New York, however, promising some announcements next month.
On the defensive after a year of turmoil and subpar sales, Motorola's leaders said they continue to cut costs even with its share of the world handset market down to 14.6% from 21.9% a year ago, according to Gartner. The latest reduction is 15% to quarterly spending on research and development for mobile devices, which the unit's new chief, Stu Reed, said will make spending more efficient.
"We aspire to be No. 1 in market share," Reed said in remarks broadcast over the Internet. But, he emphasized, "we will not do it at the expense of margin."
Motorola's handset unit, its largest, has been struggling after more than two years of phenomenal Razr sales that fell off sharply starting last year. Earlier this year, the Schaumburg, Ill.-based company warned the cell-phone segment will be unprofitable until at least 2008.
FIND MORE STORIES IN: Credit | Motorola | Motorola, Inc. | Razr
The company has disclosed plans to trim 7,500 jobs and $1 billion in costs as it tries to recover from a botched strategy of flooding emerging markets with lower-priced phones in order to gain market share.
But it has yet to come up with a worthy successor to the Razr in a market now dominated by Apple's iPhone.
Dave Novosel, an analyst for the Gimme Credit research firm, said in a report to investors Friday that "bloated costs are not the primary problem. The company needs to introduce compelling handsets, both in the U.S. and in foreign markets."
Chief Executive Ed Zander, whose job is on the line because of the slump, said the mobile phone business is strong but avoided predicting when its unit will return to double-digit operating profitability. He said consistency has been the issue for Motorola.
"We've done it, we've been there," he said. "We've got to get back on it, and do it not for three years but 30 years."
Motorola is in the process of introducing the Razr 2, although it is not expected to come anywhere near the success of the original phone.
Reed, who became president of the mobile devices unit five months after Ron Garriques quit abruptly in February, suggested the company isn't looking for a single mega-hit. He said it relied too heavily on the Razr and paid a steep price when it declined in popularity.
"We will not ride one horse to the bitter end again," he said.
Motorola shares fell 3 cents to $17.39 in afternoon trading — down 15% this year.
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They had no new products to unveil at the company's annual analyst meeting in New York, however, promising some announcements next month.
On the defensive after a year of turmoil and subpar sales, Motorola's leaders said they continue to cut costs even with its share of the world handset market down to 14.6% from 21.9% a year ago, according to Gartner. The latest reduction is 15% to quarterly spending on research and development for mobile devices, which the unit's new chief, Stu Reed, said will make spending more efficient.
"We aspire to be No. 1 in market share," Reed said in remarks broadcast over the Internet. But, he emphasized, "we will not do it at the expense of margin."
Motorola's handset unit, its largest, has been struggling after more than two years of phenomenal Razr sales that fell off sharply starting last year. Earlier this year, the Schaumburg, Ill.-based company warned the cell-phone segment will be unprofitable until at least 2008.
FIND MORE STORIES IN: Credit | Motorola | Motorola, Inc. | Razr
The company has disclosed plans to trim 7,500 jobs and $1 billion in costs as it tries to recover from a botched strategy of flooding emerging markets with lower-priced phones in order to gain market share.
But it has yet to come up with a worthy successor to the Razr in a market now dominated by Apple's iPhone.
Dave Novosel, an analyst for the Gimme Credit research firm, said in a report to investors Friday that "bloated costs are not the primary problem. The company needs to introduce compelling handsets, both in the U.S. and in foreign markets."
Chief Executive Ed Zander, whose job is on the line because of the slump, said the mobile phone business is strong but avoided predicting when its unit will return to double-digit operating profitability. He said consistency has been the issue for Motorola.
"We've done it, we've been there," he said. "We've got to get back on it, and do it not for three years but 30 years."
Motorola is in the process of introducing the Razr 2, although it is not expected to come anywhere near the success of the original phone.
Reed, who became president of the mobile devices unit five months after Ron Garriques quit abruptly in February, suggested the company isn't looking for a single mega-hit. He said it relied too heavily on the Razr and paid a steep price when it declined in popularity.
"We will not ride one horse to the bitter end again," he said.
Motorola shares fell 3 cents to $17.39 in afternoon trading — down 15% this year.
source
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I always liked Motorola Phones for their durability. somehow the RAZR fell short here and was easily damaged if you dropped it. However, I like the Motorola M800 and M900 bag phone enough to buy one like the one here on this website. It has Great voice quality and works well in remote areas. www.mobile-phone-solutions.com
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