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Nov. 2, 2008

On a conference call late Friday, Motorola CEO Sanjay Jha offered his plans to get its troubled company back on track, following its weak third quarter results.

Jha said he would be reducing costs, streamline products and delay a spinoff of its mobile handset business.

Motorola also plans to cut over 3,000 jobs, about 2,000 in the handset division alone.

It will also reduce its focus on certain foreign markets such as Europe, while increasing its emphasis in China and South America.

In its third quarter, Motorola's handset division lost $840 million, an increase from the $248 million it had lost for the corresponding period in 2007.

Unit sales dropped 32.1 percent to 25.4 million from a year earlier, and the company's market share plummeted to a meagre 8.4 percent on a global basis. Jha added that its company plans to reduce the number of operating systems it employs in its mobile devices.

Motorola plans to manufacture low-end cell phones based on its own software and high-end phones that run Microsoft's Windows Mobile and Google's Android software.

Motorola's restructuring plans are timed with the current worsening economy, and has prompted it to delay its planned spinoff of its handset division, which was originally set for early 2009.

Jha closed the conference call by stating “by mid-2010, Motorola is likely to see a handset unit which is much better equipped to increase market share in its own core segments, and at a much lower cost structure. It will also be a more attractive acquisition target for potential strategic investors.”

Technology Business Research (TBR), a technology research company based in Hampton, N.H., said it believes Motorola had no other choice but to delay its spinoff plans simply because of macroeconomic concerns.

But TBR says that the restructuring will actually benefit the mobile division by increasing the value of its wireless handset business.

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Source: Motorola.