Motorola mobile sales down; 2007 revenue drops 15%

New CEO focuses on getting phone sales 'back on track'

Motorola Wednesday reported sales of US$36.6 billion (AU$41.9 billion) for 2007, a drop of about 15% from its 2006 sales of US$42.8 billion. The company attributed the drop largely to problems selling mobile devices.

For the fourth quarter, sales were US$9.6 billion, down from US$11.7 billion in the same quarter a year earlier.

Sales of mobile devices were off by 33% for the full year, coming in at US$19 billion, the company reported. For the fourth quarter, mobile device sales were US$4.58 billion, down 38% from the same quarter in 2006.

CEO Greg Brown, who recently took the reins at Motorola, said in a statement that his team is "working to get mobile devices back on track."

The company did see some positive developments in the mobile device arena in the fourth quarter, with shipments of nearly 41 million handsets and announcements of nine different phones, including a second edition of the Razr and the U9. A phone shown at the recent International Consumer Electronics Show, the Rokr E8, won four best of show awards, Motorola officials noted.

Other segments of the company showed improvement in the quarter and for the full year. Home and network mobility sales were US$2.7 billion for the quarter, up 11% over the year-earlier quarter. And for the year, Motorola's sales in that segment hit US$10 billion, a 9% increase from 2006.

Revenues from enterprise mobility offerings were US$2.1 billion, up 35% from the same quarter a year ago, driven by sales from the Symbol Technologies business unit, which Motorola acquired in early 2007. That unit had sales of US$7.7 billion for 2007, up 43% from 2006.

Jeffrey Kagan, a technology analyst who has followed Motorola for many years, said the company has "hobbled between doing very poorly, then very well, and now poorly again."

Kagan said Motorola failed to find a device to follow the success of the first version of its Razr phone. He said Motorola may not be able to recover with a hot technology product in 2008.

"The cell phone business is very tough and changes very fast," Kagan said. "It is a technology business, but it is also a fashion business."

While Brown has good industry experience, "it will be a while before we know whether [he] can resuscitate the company," Kagan added.

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Matt Hamblen

Computerworld
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