Handset maker Sony-Ericsson said it is having a tough time. According to The Wall Street Journal (subscription required), "the mobile-phone maker continues to be hit hard by a weakening economy in Western Europe, hurting demand for the mid- to high-end handsets it specializes in."

Of course, another big market for more expensive phones is America, Motorola's (NYSE: MOT) last stronghold. The U.S. company faces a double threat now. It does not have any "hot" model to compete with new products from Nokia (NYSE: NOK), Samsung, or Apple (NASDAQ: AAPL). Now it appears that the recession is cutting demand for phones altogether.

Motorola may already be at a place where its handset operation cannot recover. Revenue in the division is dropping rapidly, and the unit is losing money. Its share of the global market has dropped from 22% two years ago to about 12%. And, the company's stock is down to a 52-week low of $7.20, about 65% down from its 52-week high.

No matter how hard it may be for other companies in the industry, the only firms that may do well over the next year are Nokia and specialized handset makers like Apple. Nokia has about 40% of the global market and sells modestly priced phones in rapidly growing markets including China and India. Apple gets the high end of the market.

In the middle is Motorola, with barely a hope of things getting better.

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

Sony-Ericsson and a warning for Motorola originally appeared on BloggingStocks on Sat, 28 Jun 2008 14:40:00 EST. Please see our terms for use of feeds.

A funny thing happened on Motorola (NYSE: MOT)'s way to selling its handset business. No one offered to buy it [subscription required]. The logical candidates are firms like LG and Sony-Ericsson that are already in the business. Credit markets are probably keeping private equity interests away.

Etta Kidron, an analyst at Oppenheimer & Co, told The Wall Street Journal, "I think going public with its intentions hasn't made it easier to find a solution and has raised doubts about Motorola's commitment to the business."

The lack of buyers may leave Motorola management in the odd position of having to turn around an operation that it does not want. The company's market share in handsets has dropped from almost 22% worldwide to 12%. The market is taking Motorola's stock down further because it is concerned that fixing the unit could take years. This is, of course, if it can be fixed at all.

Motorola's shares, which traded around $16 in December, are just over $11 now. If management wants the stock to recover, it will have to go to Wall Street with a plan for fixing the handset operation. The plan may face long odds and may mean more quarters of losses, but investors would at least like to know that the largest part of Motorola is not adrift.

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

No buyers for Motorola's (MOT) handset business originally appeared on BloggingStocks on Fri, 22 Feb 2008 10:27:00 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.