Motorola May Ditch Mobile Business

Mon, 04 Feb 2008

Motorola are reportedly looking to quit the mobile phone market following last year’s declining sales figures and poor global performance.

Talks between company bosses and shareholders are underway to decide the next step, with analysts’ suggesting it is likely that the electronics company will elect to separate its mobile devices from the rest of its other major business lines, which include TV set-top boxes and network equipment.

Despite the huge success of the Razr mobile phone, which sold over 50 million units worldwide, the leading US mobile phone manufacturer failed to expand and strengthen this range, leading to an 84 per cent slump in profits in the last quarter of 2007 to around £50 million.

In addition, increasing pressure from market leaders Nokia and Samsung has led to some suggesting that by offloading its mobile operations, Motorola would be making a wise move.

Motorola in the fourth quarter of 2007 held a 12.2 per cent market share, lagging behind Nokia's 40 per cent share and Samsung's 13.9 per cent, according to research firm IDC.

Richard Windsor of leading financial services group, Nomura International, suggested that the main problems behind the firm’s decline lie with its choice of platform and software, rather than hardware related issues.

If Motorola does decide to sell its phones division, rival firms Samsung, Sony Ericsson and LG Electronics could all consider making bids in an effort to boost market share .

Analysts have claimed that whoever ultimately owns the business will need to invest significantly to revamp and rebrand Motorola's weak product line.

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