Motorola sees R&D expense cut for mobile
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Motorola Inc  is aiming to cut its quarterly research and development expenses for mobile devices by about 15 percent by the end of 2007 to try to return to profitability.
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With a view to focusing on its wireless business, Motorola Inc. said it plans to slash 1,000 jobs, or 1 percent of its staff, and absorb charges of about $50 million.
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Motorola Inc  said on Wednesday it will post an operating loss in the current quarter as its cell phone business is taking longer than expected to turn around, dashing Wall Street hopes for a profit and sending its shares down 15 percent.
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Motorola Inc. will cut 1,000 jobs worldwide and take a charge of $50 million for severance benefits, officials said Tuesday.
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In an attempt to turn around weak quarterly results, Motorola's CEO says the company will spend less to manufacture its low-end phones.
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Struggling cell-phone maker Motorola Inc. said Thursday it is considering separating the handset unit from its other businesses in an effort to snap a deep slump that has followed its meteoric success with the Razr.
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(InfoWorld) - Amid increasing competition in a fickle cell phone market, Motorola expects to report a loss for its mobile devices business in 2007 and now estimates that second quarter sales will be lower than expected. The number two handset maker said on Wednesday that second quarter sales for the company would be $8.6 billion to $8.7 billion, instead of $9.4 billion as previously expected. That drop in expected sales is the result of lower handset sales, particularly in Asia and Europe, Motorola said. In the second quarter, Motorola expects to report sales of 35 million to 36 million handsets. That will lead to a larger operating loss for the mobile device business in the second quarter compared to the first quarter, it said. During the first quarter, Motorola sold 45.5 million phones. At the time, the company said it foresaw a gradual recovery of its mobile phone business throughout the rest of the year with expectations of a profitable year. Motorola now expects a second quarter generally accepted accounting principles loss per share in the range of $0.02 to $0.04. The company will announce its earnings for the second quarter 2007 on July 19 and will offer further details then, it said. Motorola also announced that it named a new president for the mobile division: Stu Reed, formerly executive vice president of integrated supply chain for Motorola. Reed's predecessor, Ron Garriques, left the company in February to head up Dell's global consumer division. Prior to its first quarter earnings report, Motorola also had to warn that sales would be lower than expected. It made some executive changes then, including the appointment of a new president. Earlier in the year, Motorola had implemented a new plan to help it improve profitability, but that plan wasn't working out, the company said during the first quarter earnings warning. Most of the large handset makers are struggling to keep profits up as sales in established markets like Europe stagnate as most people there already have phones. The companies are increasingly branching out into emerging markets, such as India and China, but they must sell their phones at lower prices to win customers there. That's squeezing profit margins."The only real growth is at the low end, which means there's nice unit growth, but the dollar growth is not there," said Will Strauss, an analyst with Forward Concepts. "This year is a soft year for the cell phone market, in spite of Apple," he said. Apple's hugely hyped iPhone is expected to sell around 10 million units through next year, which may sound like a lot. But this number is dwarfed by the approximately 150 million units that companies like Nokia sell in a year, Strauss said. The iPhone isn't affecting the sales of the biggest cell phone companies, but it may help companies like Motorola realize what they need to do to improve their prospects, he said. The only way that the mobile phone companies can grow profits in saturated markets is to "convince everybody that they need a new cell phone with new bells and whistles," Strauss said. "The iPhone is raising awareness of what the future cell phones are going to look like." In addition, Motorola is notorious for producing hit phones, like the Razr, that sell well but then failing to follow up with additional models that continue the momentum. "They rode too long on the Razr," Strauss said. But the handset maker could get a boost later in the year when it starts selling the Razr 2, which Avi Greengart, an analyst at Current Analysis, said is a big improvement on the first version. Motorola is likely to learn from its mistakes the first time around too. "In the past, they really let the original Razr run away with volume as opposed to maintaining it as a premium fashion phone," he said. "I think this time they're going to resist the rapid price drop." This story was updated on July 11, 2007. Â
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Cell phone maker Motorola Inc. said Wednesday it will cut another 4,000 jobs as part of a plan to improve sagging financial and operational results.
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Motorola Inc  expects a  challenging year, with recovery in its money-losing mobile  devices business taking longer than expected, Chief Executive  Greg Brown said on Wednesday.
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(InfoWorld) - In an extension of a cost-cutting program it began in January, Motorola said Wednesday it would lay off 4,000 more workers. The move will help the company to save $600 million annually starting in 2008, including additional money-saving measures like prioritizing its investments, continuing discretionary-spending controls, cutting general and administrative expenses, and site rationalization. Although it trails only Nokia in sales of wireless handsets, Motorola has struggled to translate its sales into profits. The company began this restructuring program after watching its profit drop sharply, from $1.2 billion in the fourth quarter of 2005 toÂ $624 million for the fourth quarter of 2006. The results were even worse for the first quarter of 2007, as Motorola posted a loss of $366 million compared to its profit of $849 million for the same period a year ago. In a search for change,Â the company replaced its CFO in March. At that time, chief executive Ed Zander blamed the problems on dropping prices for low-end cell phones, and Motorola's decision to give up market share instead of entering a price war with competing vendors. Also on Wednesday, Motorola said it would finish making the 3,500 job cuts it had previously announced by June 30, contributing to an estimated $400 million in annual savings. The restructuring will also incur its own costs. Motorola will subtract a one-time charge of $300 million from its savings, to pay for severance packages and other costs of the workforce reductions. "Today's actions are an update to the commitment we made during our first-quarter earnings conference call -- to drive out additional costs -- and a continuation of the plan we announced in January," Motorola'sÂ CFO Tom Meredith said in a release. Meredith promised the cuts would not distract Motorola from keeping its focus on long-term plans in customer service and support, product quality and research and development. Â
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Motorola Inc. , the world's second-biggest mobile phone maker, said it expects to cut an additional 4,000 jobs, bringing the total to 7,500 this year, as it works to reduce costs to return to profit.
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Telecommunications equipment maker Motorola Inc. said Tuesday that it would cut 1,000 jobs and take charges of about $50 million for severance benefits as part of a drive to increase productivity.
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Motorola Inc , the world's No. 3 mobile phone maker, said on Thursday it is exploring strategic alternatives including a possible separation of its mobile devices business from other units.
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Motorola posted a loss from continuing operations of $38 million, or 2 cents a share, compared with a profit of $1.35 billion, or 54 cents per share, a year earlier.
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(InfoWorld) - A troubled Motorola has realigned itself as its criticalÂ cell-phone business slows down. The company sketched out the reorganization in a U.S. Securities and Exchange Commission filing Tuesday, two days before it is set to announce its second-quarter financial results. Last week, Motorola slashed its earlier revenue forecast for the quarter and predicted a larger loss, blaming lower phone sales. It also named a new chief of its mobile unit, Stu Reed. Other recent changes in the executive ranks have also rocked the company. Motorola is now split into three divisions: Mobile Devices, Home and Networks Mobility, and Enterprise Mobility Solutions. The company is moving its Good Technology mobile e-mail software business from the Mobile Devices division into Enterprise Mobility Solutions. Its carrier equipment business has been combined with home broadband products in the Home and Networks Mobility segment with the new enterprise unit focusing on private network products. The Home and Networks Mobility group is responsible for set-top boxes and digital video systems for carriers, home DSL and cable modems, and wired and wireless broadband network gear. The Enterprise group encompasses analog and digital two-way radio and other voice and data communications systems for government, businesses and Motorola's large public safety customer base. Good Technology, whichÂ Motorola acquiredÂ in a deal completed in February, is a mobile messaging platform with enterprise features like centralized lockdown of unwanted applications on the phone. It competes against Research in Motion's BlackBerry system and Nokia's Intellisync technology. After the rousing success of the slim Razr handset, which started out as a premium-priced bauble and quickly became a mass-market commodity, Motorola has had trouble coming out with an encore. A Razr 2 is expected later this year. New handsets from Nokia, Samsung, and LG Electronics had stolen the spotlight even before Apple's iPhone, which debuted June 29, became the talk of the industry. Meanwhile, sales for all makers have stagnated in higher-priced markets like North America and Europe while rising in lower-priced India and China, according to industry analysts. Last Wednesday, Motorola said it expected to report 35 million to 36 million handset sales in the second quarter, down from 45.5 million in the previous quarter. Its revenue forecast dropped from $9.4 billion to between $8.6 billion and $8.7 billion. The company now expects to lose between $0.02 and $0.04 in the quarter.
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Motorola Inc.  plans to trim an additional 4,000 jobs this year, bringing the total cuts for 2007 to more than 11 percent of its work force, as the world's No. 2 mobile phone maker reduces costs to return to profitability.
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Motorola Inc  said on Wednesday  it will post an operating loss in the current quarter as  recovery in its cell phone business is taking longer than  expected, dashing Wall Street expectations for a profit and  sending its shares down as much as 14 percent.