The business and consumer media will be focused come this Friday with Apple's (NASDAQ: AAPL) release of its iPhone. Lines are expected at Apple retail stores and the headlines should be dominated by reviews from these early adopters. Hidden from the hoopla is Motorola (NYSE: MOT) and its prospects, which look ugly.

Motorola has been struggling with its positioning in the cell phone industry. I interviewed a cellular industry analyst yesterday who, for whatever reasons, wants to remain anonymous. He feels that Motorola is going to put up a lousy second quarter with declining market share. Currently Motorola has a 17.5% share and he expects it to fall to 16% after the second quarter is completed and announced. Ouch!

Management was successful in stemming off Carl Icahn from seeking a board seat and initiating several changes. Too bad, as shareholders would have benefited from Icahn's representation.

Motorola has blessed a revenue expectation of $8.2 billion and the analyst feels that might be a stretch. He feels Motorola has been pushing sales out the door at reduced margins to meet the Street's number. The company should also report an operating loss of about $40-50 million. The reported loss will be much larger but it will include one time restructuring charges of roughly $130 million.

The outlook for Motorola for the third quarter is not much better. Lower margin sales to the Chinese market will depress earnings, yet market share should stabilize at 16-16.5%. All-in-all, there is not a major catalyst to resurrect this company.

Motorola is trading around its 52-week low at $17.82. With slower sales and tough margins, Motorola probably could drop another 20%. Don't try to catch this falling knife.

Georges Yared is the CIO of Yared Investment Research.