Motorola Inc. (NYSE: MOT) has been in deep trouble for a while now. For some untold reason, the company placed almost all its growth bets on its wireless division but has not produced a hit handset in years. Nokia Corp. (NYSE: NOK) and Samsung Electronics have been producing and selling all kinds of cutting-edge wireless handsets to carriers all over the world. What has Motorola been up to?
It's still producing handsets, but so many of the designs and marketing strategies have been commodities lately. Meanwhile, Apple Inc. (NASDAQ: AAPL) has taken the mobile crown with the iPhone, and even Palm Inc. (NASDAQ: PALM) has risen from the dead with the new Palm Pre. Motorola was in such bad shape financially that it even suspended the spinoff of its mobile unit last year.
If Motorola CEO Sanjay Jha cannot come up with a lineup of handsets from the middle of the road to high-end smartphones, will he end up like former CEO Ed Zander -- out of a job? The first quarter of 2009 tells an ugly tale: a $509 million loss for the handset unit with sales decreasing 45% to $1.8 billion.
So, the question remains: can Motorola come back? It can't just compete -- the wireless universe is a completely different place than it was only two years ago. Motorola will have to be not just innovative, but incredibly innovative to regain any semblance of its footing in the wireless handset market. This will be Jha's charge. First order will be to restore profits, but customers won't buy Motorola's handsets en masse unless Motorola serves up at least two or three hits. At least one needs to be a good smartphone, and the Android-based announcements from the company are a great start. It now has to deliver -- and deliver a knockout.
The week in preview: Earnings from Walmart, Macy's, and other retailers
Six top trades for the rest of 2009
Comfort Zone Investing: Buffett buys Burlington
Add your comments