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Motorola Phone Sales Down, Unit Losing Money
Thursday, July 12th, 2007 at 4:00 PM - by John Martellaro
Motorola has announced that they expect to ship about 36 million mobile phones this quarter, down from 52 million a year ago in the same quarter. They also expect to report a loss for the year, according to Information Week. Meanwhile, Apple is taking the iPhone down a different path.
Motorola CEO Ed Zander, who came from Sun, has been under pressure for quite some time. Mobile phone sales are down and the company is no longer making the money it once did the mobile phone market. Mr. Zanders job could be at risk.
Stock analysts who drove the previous CEO, Christopher Gavin, out are now skeptical about Mr. Zander. "While we fully expect Zanders departure this year, there is no visibility on when," said Charter Equity, according to media reports. "His strategy is clearly not working."
"For the full year 2007, the company no longer expects the mobile device business to be profitable," Motorola said. "Second-quarter results for Connected Home Solutions and Networks & Enterprise businesses continue to meet the companys expectations."
While there has been considerable awareness of Apples iPhone lately, no one is attributing Motorolas problems to Apple. The iPhone sales, perhaps a million so far, are a tiny fraction of Motorolas sales. Analysts have, however, been critical of Motorolas pricing and business model, espcially for the RAZR, which is now routinely devalued and almost given away by carriers. That phone no longer creates the buzz it used to. That market effect could well explain Apples decision to maintain the value of the iPhone product reinforced by the Apple brand.
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