Monday morning, mobile phone firm Motorola (MOT) found itself on the lips of lawyers and judges. The first reason is that a lawsuit commenced in the U.S. District Court for the Northern District of Illinois on behalf of MOT stock purchasers who made their purchase from December 6, 2007 through January 22, 2008.

The lawsuit alleges that Motorola and "certain of its officers and directors" violated federal securities laws by "intentionally and knowingly misstating the 2007 fourth quarter earnings projections and sales demands for the RAZR2 during the 2007 holiday shopping season." The suit states that Motorola's RAZR2 did not attract buyers thanks to its $299 price tag and the fact that it had not improved enough from the RAZR. Nevertheless, Motorola made positive statements all while losing "significant market share" to its competition. The defendants claim that Motorola senior execs knew that Motorola was not on track to hit their profit forecast of 12 cents to 14 cents per share, and would like a bit of compensation.

Continue reading A Rather Litigious Monday Morning for Motorola

A Rather Litigious Monday Morning for Motorola originally appeared on BloggingStocks on Mon, 25 Jan 2010 10:40:00 EST. Please see our terms for use of feeds.

The Wall Street Journal reports that job cuts at Motorola (NYSE: MOT) will make it harder for the company to develop high-end handsets that should have strong margins. The paper writes, "In the cellphone industry, companies generally stay profitable either by efficiently producing a broad range of products or developing a hit product."

Does that mean that with fewer people Motorola cannot come out with a device that could sell millions of units a quarter? Maybe not, but maybe Motorola's prospects may be better than they seem.

Continue reading Motorola (MOT): How much do cuts hurt prospects?

Motorola (MOT): How much do cuts hurt prospects? originally appeared on BloggingStocks on Mon, 02 Feb 2009 11:11:00 EST. Please see our terms for use of feeds.

Motorola's (NYSE: MOT) handset business had a global market share of 22% two years ago after it launched its successful RAZR, but that turned out to be a "one hit wonder". On a good day, MOT's share of worldwide handset sales is 12%.

Motorola is spinning its handset operation out to the public, but it has done so poorly; it is hard to see what the public will get. The head of the new company does what all CEOs do when they are in trouble. He fires people.

Sanjay Jha, the just-hired chief executive, will also begin to adopt Google's (NASDAQ: GOOG) Android phone operating system for many of the company's new models. According to The Wall Street Journal, "Motorola is hoping that the open-source Google platform can attract developers of sophisticated applications."

Those plans are not likely to work. For starters, the Android software system is new and so far there is no evidence it will be widely adopted. While its use may spread, betting on something so novel has tremendous risks.

The other, more vexing problem is that Motorola has not had a handset design that has been a big hit with consumers in over two years. No matter what OS the company is shipping on its phones, unattractive and feature-poor products are not going to get MOT back in the game.

Product. Product. Product. Motorola does not have one. Everything else is academic.

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

Google's Android gets a new fan in Motorola originally appeared on BloggingStocks on Wed, 29 Oct 2008 11:45:00 EST. Please see our terms for use of feeds.

Motorola (MOT) shares slide down to a five-year low originally appeared on BloggingStocks on Fri, 20 Jun 2008 10:22:00 EST. Please see our terms for use of feeds.

Former Motorola insider trashes the company inside and out originally appeared on BloggingStocks on Fri, 11 Apr 2008 15:30:00 EST. Please see our terms for use of feeds.

Continue reading More job cuts for the struggling Motorola (MOT)

More job cuts for the struggling Motorola (MOT) originally appeared on BloggingStocks on Fri, 04 Apr 2008 11:20:00 EST. Please see our terms for use of feeds.

Motorola Inc. (NYSE: MOT) was hit with downgrades late in the week. Some analysts think that it sold only 40 million handsets in the fourth quarter. Rival Nokia Corp. (NYSE: NOK) usually moves about 100 million. The Razr's success is now just a memory.

Citi Investment Research lowered its price target on Motorola from $22.50 to $18.50. Most shareholders wish that the stock would hit the lower number. In after-hours trading on Friday, the shares fell to $15.

There has been much talk about breaking the company into pieces. When the company traded at $20, that was less likely. But, the MOT market cap is now only $34 billion.

Continue reading As Motorola (MOT) share price falls, break-up more likely

As Motorola (MOT) share price falls, break-up more likely originally appeared on BloggingStocks on Sat, 05 Jan 2008 13:40:00 EST. Please see our terms for use of feeds.

Motorola Inc.'s (NYSE: MOT) management is trying to convince Wall Street that the company can be turned around. In meetings Friday, CEO Ed Zander referred to the past success of the RAZR and said that the company could get back there again. "We've done it, we've been there," he said. "We've got to get back on it, and do it not for three years but 30 years." Other managers from the firm predicted that a new handset success would emerge from relying on server models and not just one mega-hit.

But, it is probably too late. Nokia Corp. (NYSE: NOK) has raised its share of global handset sales to about 36%. Motorola's has fallen to 16% from 22% at it peak a year-and-a-half ago. And sharp improvement in sales at Samsung and Sony Ericsson means that there are at least two other strong competitors.

Motorola also has to worry about what the sharp cut in the price of the Apple (NASDAQ: AAPL) iPhone will mean to the market, especially once that product goes on sale in Europe and Asia.

Motorola has two other large divisions -- its enterprise telecommunications equipment operation and its set-top box business. Both of these do fairly well. Whether all three units belong under one roof is an issue that the board should review.

But getting back its market share in the handset business is unlikely to happen. The company cannot even point to a specific plan.

Douglas A. McIntyre is a partner at 24/7 Wall St.

CEO's false promise to turn around Motorola (MOT) originally appeared on BloggingStocks on Sat, 08 Sep 2007 09:40:00 EST. Please see our terms for use of feeds.

Motorola (MOT) RAZR 2 release set for next week originally appeared on BloggingStocks on Wed, 15 Aug 2007 10:30:00 EST. Please see our terms for use of feeds.

Motorola (NYSE: MOT) pre-announced a second quarter shortfall and also indicated that the rest of 2007 will be difficult and non-profitable. The stock will more than likely be dead money for the next six to nine months as this company has yet to find its footing.

I wrote back on June 26th that Motorola would probably miss this quarter and perhaps the year. It has come true. Motorola is a company that is in trouble as it cannot make an operating profit on almost $9 billion of quarterly revenues. Motorola is attacking the European markets with mid-level product that is constantly under pricing pressures. The Motorola approach in Asia and China has been to penetrate the low-end of the cellular market which is also contending with evaporating margins.

Motorola had success with the Razr line-up of phones but has yet to come up with a killer-replacement phone and the Razr cycle has worn out its welcome.CEO Ed Zander, rightfully, is under huge pressure to perform as this once bellwether company is facing not only a tough 2007 but a challenging 2008. With Apple's (NASDAQ: AAPL) iPhone capturing market share and headlines, Motorola is hard pressed to maintain its competitive positioning in the United States.

Motorola's stock closed at $17 yesterday and I see little to any near term prospects of it lifting higher. Motorola stock may start to be interesting at the $14 level, but not until then.

Georges Yared is the Chief Investment Strategist of Yared Investment Research.

Motorola is now dead money after blowing the second quarter and year originally appeared on BloggingStocks on Thu, 12 Jul 2007 07:35:00 EST. Please see our terms for use of feeds.

You will be reading this article on Monday June 25th -- just 4 days before the launch of the Apple's (NASDAQ: AAPL) much anticipated iPhone. Analysts are gingerly trying to re-model the September 30, 2008 fiscal year: how much can iPhone contribute? How much visibility can iPhone provide to Apple's numbers for 2008, 2009 and beyond. I distinguish between "contribute" and "visibility" because Apple is going to recognize the iPhone revenues over the 24 month subscriber-contractual period.

iPhone will most likely re-set the standards for the cell phone industry. The hype surrounding the iPhone has been huge: the early adopters will provide all the headlines necessary to keep the iPhone front and center. The Apple retail store at the Mall of America outside Minneapolis expects record foot traffic and of course, sales. A senior employee told me that the interest has been "way, way more than expected".

Apple has guided the Street to expect sales of the iPhone at 10 million units by the end of 2008. This number is extremely conservative. For a point of reference, Motorola (NYSE: MOT) sold 50 million RAZR units between 2004 to 2006. The iPhone is, in a nut shell, simple to use and elegant. The software functionality will set it apart from all other cell phones. My prediction is the iPhone will be a run-away success for the next 3-5 years. So what about Apple's stock?

Continue reading Time to take sides: Apple is a BUY!

Time to take sides: Apple is a BUY! originally appeared on BloggingStocks on Mon, 25 Jun 2007 09:43:00 EST. Please see our terms for use of feeds.

Cowen & Company recently cut its forecast for Motorola (NYSE: MOT), saying that the company's handset margin would drop to 15.8% during the quarter. It peaked last year at 22%. But now, due to the company's failure to replace the RAZR with another popular model, rival Nokia (NYSE: NOK) has said that it can increase its share above the current level of 36% worldwide.

Motorola must also deal with the introduction of the Apple (NYSE: AAPL) iPhone, and a ban on Qualcomm (NASDAQ: QCOM) chips may force the company to delay some models.

Now the Carl Icahn's bid to join the board has been beaten back, there is little to hold up the company's shares. Short interest in June rose 13.6 million to 139.3 million. Since October, shares in the handset company have fallen from over $26 to about $18.

Motorola has stepped up cost cuts, saying it will cut another 4,000 this year to push its saving from lay-offs to $1 billion. But fewer and fewer investors believe that slashing personnel is the answer to the company's troubles.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Number of skeptics mount and short interest rises at Motorola originally appeared on BloggingStocks on Fri, 22 Jun 2007 11:15:00 EST. Please see our terms for use of feeds.

Once it was clear to Motorola Inc. (NYSE: MOT) that its handset business was falling apart, the company said that it would cut 3,500 of its 66,000 employees. That was in January.

Today the company said another 4,000 would have to go, and that the move would save about $600 million annually. The announcement adds to a fairly stunning set of reversals for the company that was riding high on the sales of its RAZR phones in 2005 and early 2006. The stock ran like a scalded dog from $17 two years ago to over $26 in October of last year.

Then, it became apparent that the RAZR had no legs. Competitors including Nokia Corp. (NYSE: NOK), and Sony-Ericsson were coming to market with more attractive products. These companies were also building cheaper phones that were well-suited to markets like India and China. Motorola had put too much of its bet on one model. By early May, the shares were back to $17.

Outside investors found some hope in Carl Icahn's purchase of shares and attempt to get onto the Motorola board. But, CEO Ed Zander cursed Icahn like a sailor and got enough shareholders behind him to keep Icahn out of the company. Zander did not even have the guts to be quoted in the company's PR about the layoffs. It was left to the COO and CFO to shoulder that.

Firing people may help the stock price for a day or two, and it may cut costs. But, until Motorola can show sales figures indicating that it has models to get back the market share it has lost, getting investors into the stock is going to be very tough.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Will Motorola run out of jobs to cut? originally appeared on BloggingStocks on Thu, 31 May 2007 09:00:00 EST. Please see our terms for use of feeds.

If Carl Icahn wins a seat on Motorola Inc.'s (NYSE: MOT) board of directors, Chief Executive Ed Zander will be looking for another job. That might happen if Icahn looses too.

The billionaire activist investor today stepped up his campaign against Zander ahead of the company's annual meeting on Monday with full-page advertisements blasting the embattled CEO, according to the Wall Street Journal (subscription required). He criticized comments Zander reportedly made about "hating" his customers as being "straight out of Alice in Wonderland."

How Zander and Icahn will be able to work together if the one-time corporate raider prevails is beyond me. I also wonder how effective Zander can be following Ichan's brutal proxy fight.

In an effort at damage control, Motorola said Zander was "joking" about "hating" Motorola's customers, the Journal said. Shareholders, though, seriously have found little to like about Motorola who stock has plunged more than 18% this year. The company's recent first quarter earnings were lousy and the second quarter isn't looking that great either.

Though proxy battles aren't easy to win, Icahn stands a good chance of prevailing with Motorola. Icahn probably wouldn't stay on the board for long anyway if he won. He doesn't seem to operating companies as much as shaking them up.

Can Motorola's CEO work with Icahn? originally appeared on BloggingStocks on Tue, 01 May 2007 08:05:00 EST. Please see our terms for use of feeds.

• The biggest impact was in the "smart phone" space, with Research in Motion Ltd. (NASDAQ: RIMM) and Palm Inc. (NASDAQ: PALM) both getting killed yesterday. RiM dropped 7.85% and Palm dropped 5.69%, most likely because in less than two hours, Steve Jobs proved their phones weren't so smart after all.
• There was a smaller wake left in the traditional handset manufacturer space, with Nokia Corp. (NYSE: NOK) and Motorola Inc. (NYSE: MOT) each dropping a little over 1%. I found this mildly surprising, as the trendy teen market that spends on phones like the Motorola RAZR would seem to me to be the most likely to rush out to buy the iPhone, regardless of its high price point.
• There was absolutely no effect in the telecommunications space. AT&T Inc. (NYSE: T), which owns Cingular, rose a meager 13 cents on the news that it would be the exclusive carrier of the phone, and Verizon Communications (NYSE: VZ) also rose slightly despite getting left out. Sprint Nextel (NYSE: S) went to hell yesterday, dropping over 11%, but that was due to an unrelated announcement regarding the company lowering guidance. The lack of movement in telecom signals to me the market's belief that Cingular's exclusivity deal will not last that long.
• Apple rival, Microsoft Corp. (NASDAQ: MSFT) also wasn't affected, rising 3 cents on the day, most likely because if the Microsoft Zune couldn't compete with the current generation of iPods, the iPhone being far superior was irrelevant.

Apple iPhone causes wake throughout markets originally appeared on BloggingStocks on Wed, 10 Jan 2007 10:16:00 EST. Please see our terms for use of feeds.

Motorola's stock had an extraordinary showing in the quarter ending September 29. The stock rose 25% to $25. Much to the dismay of Nokia, Samsung, and Sony Ericsson, the US cellphone company and it RAZR won't go away. Along with strong year-over-year growth the last two calendar years, the company's last quarter was extremely strong with revenue of $10.5 billion and operating income of $1.5 billion.

Sony Ericsson recently opened a factory in China in the hopes of picking up share from Motorola, Inc. (NYSE: MOT) and others, but "it's the product, stupid." In 2003, Nokia had 40% of the global share in handsets, but Motorola's thin phones are becoming a hit in emerging markets as well as places like the US. And, MOT is hardly standing still. It is moving deeper into the video delivery market. It is also improving its share of the enterprise wireless business which is spearheaded by its purchase of Symbol Technologies.

Perhaps as important as all of these other initiatives is the company's move into WiMax with partners Samsung and Intel. Sprint has already adopted the tech for its next generation broadband-enabled phones, and the technology is in trial in dozens of countries around the globe.

Wall Street is bidding up Motorola because it is one of the few big tech companies that is hitting on all cylinders. If the company does not have any significant missteps, the rise in share price may continue.

Douglas McIntyre is a partner at 24/7 Wall St.

Motorola is hitting on all cylinders originally appeared on BloggingStocks on Tue, 03 Oct 2006 09:10:00 EST. Please see our terms for use of feeds.

According to a posting on the always-speculative Thinksecret.com, an agreement has reportedly been signed between and Apple and Cingular to offer the iPhone exclusively through Cingular for the first six months after the phone is launched.

Since I use Verizon, as do most of my Apple-enthusiast friends, I guess we'll just have to wait even longer for this much-ballyhooed Apple-branded handset. Either that, or I can follow the herd in switching mobile service providers -- as was the case when RAZR hit the market a little less then two years ago.

Apple's phone will reportedly feature a candy-bar design with a 2.2-inch display and 3MP camera. Robust iTunes and iSync support will also be delivered with the phone. Insiders say Apple is internally estimating that shipments of the iPhone will top an astonishing 25 million in 2007 alone. In contrast the RAZR has sold more than 50 million units since its launch in late 2004.

The release date for the phone is rumored early 2007 and look for it to sweep through college campuses following its release. On my campus, the scuttlebutt has already started.

Apple iPhone exclusive to Cingular: gentlemen, start your scuttlebutts! originally appeared on BloggingStocks on Wed, 27 Sep 2006 15:22:00 EST. Please see our terms for use of feeds.

Motorola one of the most trusted wireless brands in U.S. originally appeared on BloggingStocks on Wed, 23 Aug 2006 14:32:00 EST. Please see our terms for use of feeds.