Is Motorola being squeezed out of the mobile phone market?
Motorola have announced their latest financial Sales and Earnings figures for the third quarter of 2007 - and they ain't pretty. Although the company as a whole recorded sales of $8.8 billion and a positive operating cash flow of $342 million, it's mobile phone division is hitting crisis levels, with sales having dropped 36 percent compared to the third quarter 2006, which itself wasn't a particularly good quarter.
In all, Motorola's Mobile Devices unit lost $138 million in that quarter alone, showing that its new handsets just aren't selling at anywhere near the level they need to in order for the company to sustain itself in the cut-throat mobile phone world.
On a more positive note, the company's other units were significantly more profitable, with its Home and Networks Mobility Division (makers of IPTV and other such things) reporting sales up 6% to $2.4 billion and its Enterprise Mobility Solutions unit reporting sales up by a massive 47% to $2 billion.
The Enterprise Mobility Solutions division produces some quite dull equipment, such as:
- MOTOTRBO, a dual-mode digital 2-way communications platform that integrates voice and data, in key markets in Asia and Latin America.
- the MC9000, the industry leading rugged mobile computer.
- the MC17 mobile computer, aimed at retail, in-store applications for enhanced personal shopping experiences.
However, although these aren't exactly what you'd call sexy, they're obviously selling well. Given Motorola's perilous slide form fat profitability off the back of the original RAZR to today's dire mess, where it's slipped from number 1 to number 3 amongst the handset manufacturers and continually loses money as it churns out phones that are simply not up to the standards of its competitors, it makes you wonder how long they'll stay in the mobile phone market for.
Businesses aren't about sexy tech - they're about making products that sell, and if Motorola can't make its mobile phones sell soon, it won't be long before it'll have to reconsider its position in the marketplace, and maybe focus purely on those non-sexy rigged and infrastructure items.
[Source: Motorola]
