Menu
Motorola sees slowdown in mobile sales

Motorola sees slowdown in mobile sales

Motorola warned that second quarter sales and earnings will be lower than expected.

Amid increasing competition in a fickle cell phone market, Motorola Inc. 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 US$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 (GAAP) 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 Inc.'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 such as Europe stagnate since 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.

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.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Featured

Slideshows

Reseller News launches alumnae breakfast for Women in ICT Awards

Reseller News launches alumnae breakfast for Women in ICT Awards

Reseller News hosted the first alumnae breakfast for the Women in ICT Awards in New Zealand, designed to showcase the leading female leaders in the industry. Held at The Cordis in Auckland, attendees came together to hear inspiring keynotes and panel discussions, alongside high-level networking among peers.

Reseller News launches alumnae breakfast for Women in ICT Awards
Reseller News Innovation Awards 2018: meet the top performing partners

Reseller News Innovation Awards 2018: meet the top performing partners

Reseller News honoured the industry’s finest on a standout evening for the New Zealand channel, recognising the achievements of established partners, emerging players and innovative start-ups, in front of over 460 technology leaders in Auckland.

Reseller News Innovation Awards 2018: meet the top performing partners
Show Comments