Motorola should 'sell handset arm or launch joint venture'

Motorola should 'sell handset arm or launch joint venture'

The struggling handset division at Motorola continues to hold back other  recovering parts of the business, according to some analysts.

Ovum was shocked by what it called a ‘horrifying lack of optimism’ about recovery in the handset business, following publication of the latest results. 

Ovum's Martin Garner commented: ‘Given the length and depth of the handset problems, it's increasingly difficult to see why shareholders should see logic in keeping the divisions together.  Are there really valuable synergies between the other divisions and a handset business that is in such difficulty? Or would it be better to break the company up?

‘We think that a sale is unlikely. But there might be interest in a Sony Ericsson style joint venture.’

Richard Windsor of Nomura said that the problems of the handset business were of Motorola's making, not the market. He criticised the dull portfolio, which lay behind falling market share: 'The problem has been exacerbated as new products have failed to generate interest.. competitors are coming up with much more exciting products.

'Motorola's guidance is implying that [handset] revenues will fall by 22% QoQ in Q1 with margins collapsing to -15%... There appears little chance of recovery before the end of 2008,' he added.


On Thursday, Motorola shares were quoted at $9. The chart below shows how this compares with earlier in the year. (Source: digitallook.com)

PeriodPriceChangeChange       
1 week$14.01-$4.000-28.55%
1 month$16.35-$6.340-38.78%
3 months$18.95-$8.940-47.18%
6 months$17.83-$7.820-43.86%
1 year$18.53-$8.520-45.98%
Written by Mobile Today
Mobile Today

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