Motorola is postponing the spin-off of its mobile division due to less encouraging financials. This was initially planned for the third quarter of 2009. The cell phone maker said it will refocus mobile device development on two platforms, Android and Windows Mobile, reducing costs. Motorola will probably launch its first Android smartphone in the fourth quarter of 2009. As for the financial issues, Motorola reported a net loss of $397 million for the third quarter, compared to a $40 million profit a year ago. Furthermore, revenue dropped 15 percent, to $7.48 billion. Sales in the mobile devices unit were $3.1 billion, down 31 percent compared to the same period in 2007. Motorola’s most recent product is the first device to feature a touch screen display and it’s called Krave ZN4. It seems that the company has enough money to restructure, avoiding the economic downturn. In the restructuration process, Motorola plans to cut about 3,000 jobs, two-thirds of them in the handset division. The emphasis will be stepped up on the Americas and China, Europe appearing to be less attractive for the company. Analysts think that Motorola’s market share is likely to keep falling in the coming year and that its shares might dip as low as 6% next year. The focus on making its phones more profitable could sacrifice the scale that makes it able to compete with bigger rivals including Nokia. Motorola makes 100 million units a year, any drop in the number making each phone’s price grow. The company intends to make an $800 million budget cut.
|