Motorola Handset Market Share and Profits Down

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Motorola announced today that its profit fell 84% in the fourth quarter and that its handset division is struggling. CEO Greg Brown acknowledged that the No. 3 cellphone maker isn’t doing what needs to be done to keep and improve its global handset market share. At the end of 2006, Motorola had 23% worldwide market share. By the end of 2007 it dropped to 13%.

“Demand for some of our products has slowed in an intensified competitive landscape,” he said on a conference call. “Our consistency of new product introduction is still not where it needs to be. And we still have gaps in the portfolio in areas that are experiencing high rates of growth, including 3G (third-generation), China and other emerging markets.”

The mobile phone unit lost $388 million and shipped 40.9 million handsets during the fourth quarter. In morning trading, Motorola shares dropped $1.97 which is about 16% of its value. Overall company sales fell to $9.65 billion from $11.79 billion from a year ago.

JMP Securities analyst Samuel Wilson said there’s “still a long way to go before Motorola is fixed.”

“Motorola still has a number of issues with its volatile business model. We believe it may be one to two years before the company has redeveloped its handset business to be less hits-driven and more platform-oriented,” he said in a note to investors.

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