For the Motorola Inc., the Schaumburg, Illinois-based company that once revolutionized the mobile communications landscape with its pathbreaking invention of the wireless phone and dominated the industry for long, these are surely not the best of the times. The company, to the horror of millions of Moto (as its handsets are popularly known) fans and market analysts, recently announced that it incurred losses to the tune of $181 mn during the first quarter ending March 31, 2007 as against profits of $686 mn in the corresponding quarter in the previous fiscal year. The poor results come on the back of a recent reshuffle in the management which was necessitated after the continued slump in its once-prosperous core business of handsets. The embattled giant shipped only 45.4 million handsets during the said quarter, down from 65.7 million shipped during the fourth quarter of the previous fiscal as it failed to push sales in the lucrative emerging markets such as India and China. As a result, revenue in its core mobile handsets division was down 15% as compared to the same quarter of the previous year. A section of analysts even blame it on the company's failure to develop a blockbuster successor to the hugely successful but now ageing Razr phones.
And it appears there is more bad news in store for investors as the mobile major does not expect its fortunes to improve in the near future, at least in the next few quarters. "As I said a few weeks ago, the performance in our Mobile Devices business in the first quarter is unacceptable and we are committed to restoring it to an appropriate level of profitability," said Zander. However, jittery investors have already pulled down the stocks this year to the levels seen only in 2005.
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