Motorola Inc. (NYSE: MOT) just can't seem to find a sliver of good news to hang on to these days. The cellphone manufacturer based outside of Chicago saw its shares hit a five-year low this week as the outlook for its cellphone division continues to worsen. The company is in the midst of preparing to spin off the division to rid itself of that baggage. It's a sad state when that "baggage" is what defines Motorola.

Motorola contract manufacturer FoxConn had some cautious words to say this week as well, which probably helped propel Motorola's shares downward to $7.61, a level not seen since May 2003. After losing $194 million in the first quarter alone, it's just bewildering to see how such a great company completely lost its way, financially speaking.

It's not getting any better. The company's product launches have been described as a "half-baked mess" and it can't seem to find a knack for the cellphone handset design that it made so famous years ago with the RAZR. Motorola certainly isn't a one-hit wonder, but in the brutal cellphone market you need a hit every year to stay at the top of your game. Korean giant Samsung Electronics passed Motorola by in 2007 to become the world's second-largest cellphone manufacturer by having a whole host of cellphone designs available to almost every wireless carrier in the world. That's just for starters, but for Motorola, it seems to be an impossible goal at the moment.

Motorola (NYSE: MOT) is getting close to picking a CEO for its handset division. The operation is going to be spun-out next year. Its worldwide share of the cell phone business has fallen from 22% to about 10% over the last two years.

The CEO search may be one of those odd situations where a chimpanzee may be as good as a man.

According to The Wall Street Journal, "Chief Executive Greg Brown is desperate to find a manager to turn around Motorola's mobile-devices division, which has lost $1.6 billion since January 2007, when its hit Razr phone ran out of steam." But, can new management do what two previous generations of managers at Motorola could not do? The company has been effectively flanked by the world's largest handset company, Nokia (NYSE: NOK), along with Samsung and Sony Ericsson. Getting back any market share may be hard for Motorola.

The spin-off also raises the issue of how the new unit will find capital. It will need at least $2 billion to $3 billion in cash. For a failing company, that may be hard to come by.

Motorola now trades at $9. Its enterprise and home electronics divisions could be worth as much as its $20 billion market cap. That leaves the handset unit with a value of zero.

Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 newsletter.

As cell phone usage continues to spread, more and more Americans are rarely, if ever, talking on landlines anymore. According to a new study, 3 out of 10 homes in the country are virtually completely relying on cell phones.

Cell phones are definitely more convenient, and the more we use them, the more we want to put the days of landlines in our past. According to the study, 16 percent of all homes in the country did not even have a landline installed during the second half of last year.

In addition to the 16 percent of homes that did not even have a landline, 13% of homes in the country had landlines, but reportedly never use them. For the most part, these lines are used exclusively for computers, or to have in the case of an emergency. Whenever you need to call an emergency service number it is advisable to use a landline, because it makes it much easier to identify your location.

Last night, handset maker Motorola Inc. (NYSE: MOT) announced that it would be slashing another 2,600 jobs as the company continues to battle lower sales. The current job cuts represent approximately 4% of its total job force as of the end of 2007 of 66,000 employees.

It wasn't that long ago that Motorola was a major force in the world of mobile phones, but over the past two years the company has definitely fallen from grace among consumers. Two years ago the company was the world's second largest handset maker, but that status is no more, and the company is currently sitting in the fourth spot overall.

Analysts have blamed the company's drop due to lack of innovation, and some have gone so far as to predict that the company's handset business is doomed if Motorola can not pick up the pace and start to pump out new and fresh ideas for consumers to gobble up.

Most of the time, I read the news because I want to be informed about the world. Looking through articles, I spend my time on the ones that affect my world, give me an idea about what to expect in the future, and generally make everything clearer. Once in a while, though, I read the news for the sweet taste of revenge.

Looking through the paper today, I noticed that Sprint seems to be in big trouble. Yesterday, their stock dropped more than 9% after they announced a loss of over $29 billion in the fourth quarter of 2007. While this loss was largely tied to Sprint's disastrous merger with Nextel, a fair bit can also be chalked up to Sprint's abysmal customer service.

I have a lot of experience with Sprint's customer service. When I first got a cell phone, almost ten years ago, my provider was a small regional company. While I could only call from a very constrained area, I was generally impressed with the level of customer care that my provider offered. Most of the time, my phone calls were answered by a person, not a machine, and the company was very nice about crediting my account in cases of incorrect billing. Unfortunately, I was only with them for a few months before they were bought out by Sprint.

About 1 million people may have illegally hacked into their Apple Inc. (NASDAQ: AAPL) iPhones so that they no longer are required to use AT&T Inc.'s (NYSE: T) network, according to an estimate by a well-regarded Wall Street analyst.

The estimate by Sanford Bernstein's Toni Sacconaghi is astounding considering that there were 3.75 million iPhones sold last year, according to a summary of his report on Bloomberg News. For those of you doing the math, that equals 27% of all of the so-called Jesus phones. Another analyst, Gene Munster of Piper Jaffray, pegs the figure at 838,000.

But as Bloomberg notes, Sacconaghi believes the situation is serious since, "for every 1 million unlocked iPhones, Apple loses $300 million to $400 million in future revenue and profit, and may also find it more difficult to sign deals with new carriers."

So far, Apple has been unable to thwart the hackers and the problem is only going to get worse. Gadget freaks, like the rest of the world, are becoming increasingly worried about the economy. The iPhone that looked like the best thing since sliced bread last year may have become a drain on their wallets this year. The end result is that they will look for the cheapest way to operate their gizmo.

This is an issue Apple cannot afford to ignore.

The new product turnaround at Motorola (NYSE: MOT) may already be crippled. One analyst, quoted by Bloomberg said, "The Razr 2 didn't set the world on fire and it won't be a phenomenon like the original one."

The cause of Motorola's problem with its newest product may be the Apple (NASDAQ: AAPL) iPhone, which appears to have sold more than two million units in the last quarter of 2007.

While the RAZR2 may be a better product than its predecessor, Apple, Nokia (NYSE: NOK), Samsung and Sony Ericsson have all introduced similar products to take advantage of the high-end multimedia handset space. Motorola may be squeezed out of a market it helped create.

With its shares trading just above $13, near a 52-week low, a weak fourth quarter earnings report could take the stock much closer to $10.

Douglas A. McIntyre is an editor at 247wallst.com.

Motorola Corp. (NYSE: MOT) Chief Executive Ed Zander is stepping down as of January 1, according to CNBC's David Faber. He is being replaced by president and chief operating officer Greg Brown.

Zander, who was brought to the company to replace the mess created by his predecessor Chris Galvin, will remain as chairman. Shares of Motorola are down about 29% over the past year. They are trading up in pre-market trading.

The move isn't surprising since Zander was on thin ice with investors for a long time, including billionaire activist Carl Icahn.

"Until recently, much of the blame for the ailing mobile-phone business was laid at the feet of Motorola's former cell phone czar, Ron Garriques, who was criticized for chasing market share at the expense of profitability," BusinessWeek wrote in July. "But in the absence of Garriques, who bolted for Dell (DELL) in February, the buck stops with Zander, investors say."

The NPD Group released its quarterly run-down on the mobile phone industry. The research organization, known for its comprehensive consumer and retail information, looks at quarterly sales numbers and compares the findings to its own historical numbers.

There is definitely some salient info for investors looking at or in the mobile phone market:

• Smart phone are on fire: "the percentage of smartphones sold during the third quarter increased from 4% of all phone sales in the third quarter of 2006 to 11% during the same timeframe in 2007 – an increase of 163% year over year."
• Convergence of musical devices with phones: "Fifty percent of new phones were able to play music in the third quarter of 2007 (double the prior year) and 11 percent were smartphones."

"The mobile phone market is not only growing, it is growing smarter," said Ross Rubin, director of industry analysis for NPD. "The nearly threefold increase in smartphones shows that this once negligible niche is becoming a more influential force in the consumer market -- attracting entrants such as Apple, Inc. (Nasdaq: AAPL) and the Open Handset Alliance."

While Motorola, Inc. (NYSE: MOT) commanded the largest marketshare of the top 5 manufacturers at 31%, growth in the industry (47% year over year) is jacking up the competition. Apple has made a splash with the iPhone and its going to be interesting to see what route Google, Inc. (Nasdaq: GOOG) is going to take with its rumored gPhone. Read Sheldon Liber's good analysis of what Google may be planning to do with a mobile platform.

As the iPhone gets more traction, it will be interesting to see what NPD's analysis will look like in a year from now.

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Disclosure: He holds a position in GOOG but none in the other stocks mentioned.

In business, the company with the information has the power -- especially in the computer industry. The information behind NAND flash memory, the type of memory used in digital cameras, USB flash drives and cell phones, is almost exclusively controlled by SanDisk Corp. (NASDAQ: SNDK), a California-based company that owns more than 1,000 patents on NAND technology worldwide.

Because of these exclusive patents, which the company defends ferociously, of course, SanDisk is the only company that can manufacture every kind of flash card format. Recent acquisitions of two other companies (and their patents) mean that SanDisk should be able to maintain this competitive advantage through 2010. So not only does SanDisk sell memory cards to many component manufacturers (like cell phone makers) and direct to the consumer (in the form of memory cards like the one you have for your digital camera), its licensing of its technologies means that SanDisk earns money on almost every sale of NAND memory worldwide.

Third quarter revenue grew by 25%, but the stock price did falter after the company estimated that there may be a drop in gross earning margins through the end of the year as it lowers the price of its products to reflect consumer demand. That said, Goldman Sachs is still calling this a conviction buy, and continuing demand for NAND memory, particularly in the cell phone market, coupled with SanDisk's virtual monopoly on the technology, backs up my conviction that this is a strong pick.

Type of Stock: SanDisk is the world's largest supplier of flash memory data storage products.

Price Target: SanDisk is currently trading in the mid-$40s after a drop to $39 last week following the earnings reports -- I'd grab it now as it climbs back up again. As tech continues to be strong and momentum buyers join value investors, you should see SanDisk hit $50 within the next 12 months.
Hilary Kramer,author of the newly released Ahead of the Curve, is a financial editor and money coach for AOL and an authority on investing.

Visit AOL Money & Finance for more earnings coverage

AT&T Inc. (NYSE: T) has extended its relationship with internet music provider Napster Inc. (NASDAQ: NAPS), according to Billboard. The new deal makes AT&T the ninth wireless provider to use Napster and includes "over-the-air, full-song downloads" and customer access to Napster's entire 5-million song catalog. With prices of $3 per song and $7.50 per five-pack, customers will also be able to download songs purchased with their phone onto their computer, provided they download the Napster software. However, a subscription service allowing customers to pay a monthly rate for unlimited downloads will not be offered in the new deal.

The Napster deal is the latest in a string of deals for AT&T that increases the amount of music and related media customers can access from AT&T phones. Billboard comments "the move puts AT&T on par with competitors Sprint (NYSE: S) and Verizon Wireless (NYSE: VZ), both of which have offered a full-song download service for close to two years now."

Last month, AT&T made a separate "over-the-air" deal with eMusic to bring Digital Rights Management-free songs to phones. Napster becomes the second "o-t-a" deal for the company, bringing the largest catalog but no DRM-free.

It's no surprise that AT&T would increase the amount of content offered, especially to better compete with other wireless providers. The only drawback seems to be pricing and the lack of a subscription-based service. Of course, a subscription service would curb those high prices, but limit profit for either company in the new deal. The $3 tag for songs on the phone hardly competes with the same tracks online or in other digital music stores, and both eMusic and Napster offer $9.95 subscription services online. In any case, this is a smart move because it does offer more content on AT&T phones and allows the company to compete with other wireless providers directly.

Nokia Corp. (NYSE: NOK), the world's largest manufacturer of wireless handsets, saw a very admirable rise in Q3 profit levels -- to the tune of 85% growth -- on the backs of increasing awareness and sales in emerging markets. Nokia, which has about 39% share of the global cellphone market at this time, also explained that it expected this level to remain throughout the Q4 period.

Years ago, the word was that Nokia had lost some edge and that Motorola (NYSE: MOT) and South Korean stalwart Samsung Electronics would eat handily into Nokia's market share. That has not happened, as Samsung has still been growing, and Motorola's product lineup has completely stagnated until just recently. Nokia went on the offensive at the end of 2005 with higher-end smartphones, decent mid-level phones and an attack into the entry-level, emerging market and has not looked back since.

Nokia's Q3 net income beat analyst estimates as well, coming in at €1.56 billion ($2.21 billion), or 40 eurocents per share. Nokia executives explained the growth as coming from new, lucrative multimedia handsets in addition to growing sales in emerging markets. One gray cloud over the company for Q3 was from its mobile networks joint venture with Germany's Siemens AG. As what seems always to happen, handset sales are the growth engine, while infrastructure and related equipment take a back seat. In Q3, that seat was at the very rear of the bus for Nokia.

Samsung Electronics (LSE: SMSN) is a big name in the consumer electronics field these days. Personally, I use a Samsung cellphone, color laser printer, LCD computer monitor and more. In many cases, Samsung products have entered my home due to good pricing, stylish quality and excellent craftsmanship. Those amenities are apparently not enough to keep large profits flowing into South Korea's largest company (by revenue).

Samsung continues to be the world's largest seller of flat-panel screens (computer monitors and flat-panel televisions) and is a staple in the cellphone world, serving virtually every global market that exists along with almost every wireless carrier in established wireless markets. But, even with that, the company's share price is down 10% this year, and the company is expected to report its fourth straight quarter of declining profit. What's happened?

Margins have plummeted in many areas where it leads, such as flat-panel technology and computer components (Samsung makes more computer RAM memory than any other company). The company has been slow to create market-leading awareness in higher-margin businesses (like color laser printers), and its recent quarterly results show this. Are customers increasingly being more satisfied with Samsung's products, thereby waiting on upgrading and considering price as the main factor when they do? Perhaps.

Consumers in emerging markets have these same concerns as well (especially price), so where are all these new high-margin product segments at, then? That's the magic 8-ball question. I'll say this: I've owned a high-end Samsung cellphone since January of this year and don't plan on upgrading it for a long time. Why? Well, it works great and has every conceivable feature I could ever need in a cellphone. Samsung doesn't want to hear that, though. In other words, it may be making many products so good that customers have a stagnating need to buy the latest and greatest.

Google, Inc. (NASDAQ: GOOG) likes to make the most complex thing you'll ever do into the most simplest task. Much of the planet knows how easy it is to use Google's market-leading search engine, but the talent and technology to make that possible would be mind-boggling to many of us.

If you've used a cellphone in the last year, you're probably aware of how complex that category has become. In standard fashion, cellphone makers and wireless carriers both are cramming more features into wireless phones these days as a way to recruit more customers. Long gone are the old differentiators like coverage area and minute packages, and in are MP3 players, streaming video and amazingly complex user interfaces for even the most basic of cellphones. Google wants to change that, and apparently it won't bother with yet another handset that would just get lost in the fray.

No, Google's simplistic approach, as it always has been, may be in the software that powers these devices instead of making the hardware itself. Right now, Microsoft Corp. (NASDAQ: MSFT) makes the Windows Mobile operating system for advanced wireless phones, but it's laden with overkill for most of us. Yes, we all want email and multimedia applications on our phones, but we can do without the complexity current solutions have to offer. If Google were to license or give away its mobile operating system technology to manufacturers and have a say in the design itself beyond the software -- and support the effort using in-phone advertising of some sort -- the world of cellphones could change for the better. If we thought the Apple, Inc. (NASDAQ: AAPL) iPhone was "revolutionary,'" then maybe the 'gPhone' could be one step beyond that.

While mobile is a large business, it's not easy for start-ups. Just look at Amp'd Mobile. Despite raising $360 million, the company went bust.

But that's not stopping Daniel Neal. He is a veteran of the tech world and has been thinking about creating a new-fangled mobile service since the mid-1990s. His idea is to create a cell service to meet the needs of kids.

Well, he has come a long way since then. Now, he is the CEO of fast-growing kajeet. The company recently snagged $36.8 million in venture capital. The investors include heavyweights like Draper Fisher Jurvetson Growth Fund, Bessemer Venture Partners, Fidelity Ventures, Gabriel Venture Partners and InterWest Partners.

Basically, kajeet has a pay-as-you-go cell service for kids. "People fail to realize that kids are very smart," said Neal, in a BloggingStocks.com interview. "Kids often know more about the options on a cell phone then their parents."