To say Motorola is in pain would be an understatement. The company’s latest figures show a first-quarter loss grew to $AUD 210 million, with net sales falling about 21 per cent to $AUD 8.10 billion.

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According to Gartner in 2006, the company claimed over 21 per cent of the worldwide market for handsets. By the end of 2007, this figure had slipped to just over 14 per cent.

This 39 per cent plunge in sales in its mobile phone business was coupled with a total operating loss of $AUD 454 million, an almost 80 per cent greater loss than its $AUD253 million result last year.

These figures look even worse when one considers the fact that the global mobile phone actually grew by more than 14 percent last year.
And at the same time, its rival Nokia saw its own global market share expand to almost 40 per cent.

Some analysts have asked whether Motorola and its  $20 billion mobile phone business can even survive.
In the fourth quarter of last year, its sales nose-dived 38 per cent, resulting in a $AUD1.3 billion loss for the division. This pushed Motorola into the red, setting the stage for its breakup plan.



So Motorola’s answer is to split itself into two parts: one part being devoted to the money-losing handset business, while the other to the profitable part that provides software, hardware and broadband gear to a range of government and corporate customers, which earns the company roughly $AUD20 billion in revenue.

The split, which will result in two independent entities is expected to take about a year to complete.

So perhaps then the company can reinvent itself as a mobile phone maker once again.


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