Wednesday, January 30, 2008

Who is Going To Prey On Motorola's Vulnerability? Apple?

Richard Windsor of the London-based firm explains that an investigation suggests Motorola would drop the segment entirely and instead focus on its enterprise and government sectors.Talks of a Chinese takeover, however, are an "old chestnut" that isn't likely to come true unless a buying firm knows how to mend Motorola's business, the analyst says. Instead, the American company is most likely to become profitable only after enduring a "very difficult" 2008.Motorola is already said to be suffering, and in the fourth calendar quarter of 2007 reported a 38 percent drop in its mobile device sales compared to the same period a year ago -- a stark contrast to an industry widely agreed to be growing over time. The departure of Ed Zander from Motorola's chief executive spot in mid-quarter is understood to have been partly driven by the increasingly poor results.The researcher sees this as a trend for other handset makers as well. Other leading cellphone designers such as Samsung and Sony-Ericsson are also expected to prey on Motorola's vulnerability. Though still small, Apple has also been cited in industry surveys as stealing marketshare and perceived influence from Motorola with the iPhone.For Apple, a Motorola departure would only serve to vindicate its decision to create its own handset. The failure of the ROKR E1 music phone in both its awkward hardware and feature-limited iTunes software were reportedly frustrating enough to Apple head Steve Jobs that he launched an end-run around Motorola, discussing an Apple-made phone with Cingular (now AT&T) even before the ROKR reached store shelves.

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