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Motorola struggles to keep mobile phone business alive V.J. | , 10:58 a.m. May 6, 2009 2009-05-06

Motorola had a tough time in the past as well. It was just five years ago when they made a comeback with the sleek Razr, and absolutely superb handset. Now, however, tough times are faced again.

Motorola, as far as the latest polls suggest, is the top mobile phone seller in the US. Unfortunately, their sales are now falling almost 50 percent a year. There was a time when the company was accounting for half of the cell phone sales in the world, however, its share of the marked fell to 6 percent.

Analysts today do not ask if Motorola will make another come back and become once again dominant in the industry, they wonder if the company’s mobile phone division will survive.

Edward Snyder, an analyst at the Charter Equity Research, said:  “They’re stuck heavily in the handset death spiral”. However, Sanjay K. Jha, Motorola’s co-chief executive, said that he was not interested in market share or hit products, but he said that he is interested in “break-even performance” and that he is trying to build a stable machine, according to Data Storage Today.

Motorola has recently announced that the operating loss in the handset division widened to $509 million in Q1 and a loss of $418 million a year earlier. According to reports, the company’s first quarter results show mobile device sales dropped 45 percent to $1.8 billion. It sold just 14.7 million handsets, down from 27.4 million a year earlier, writes Data Storage Today.

By every aspect, the company seems to be in big troubles. However, Todd Koffman, an analyst at Raymond James, who said he has a strong buy rating on Motorola stock said that the company is judged too quickly.

"This quarter's results are not relevant," Mr. Koffman said. "The June quarter's results are not relevant," Koffman said, adding that the real test for the handset division will come in the second half of this year when Motorola releases devices that have Mr. Jha’s prints all over them.

We’ll see if the handset division will survive, but the majority of analysts are not very optimistic.

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