UPDATE:Motorola CEO Jha Sees Significantly Better Results In '10
October 29 2009 - 9:42AM
Dow Jones News
Motorola Inc.'s (MOT) handset business should perform
significantly better financially next year, according to co-Chief
Executive Sanjay Jha.
The company's troubled handset unit expects higher
fourth-quarter sales on a sequential basis, largely thanks to the
launch of its two high-profile smartphones, Jha said. He added that
he expects the handset business to break even in at least one
quarter next year, where results will be driven by its smartphone
portfolio.
"Taken the first steps to position ourselves to addressing the
mobilization of the Internet," he told analysts during a conference
call on Thursday.
He added that a majority of its smartphones next year will
feature its MotoBlur user interface, which is in the Cliq for
T-Mobile USA.
The smartphone business may grow faster than many people expect,
Jha said, but the feature phone business has a limited "profit
pool." While Jha believes the company can make a profit off of
feature phones, it will only be a modest one, he said.
He eventually wants to bring devices using Google Inc.'s (GOOG)
Android software closer to the feature phone market by bringing
wholesale phone prices down to $200, but Jha declined to give a
timeframe for when prices would drop that far. He added that the
price drop was key to the rapid expansion of Android to
consumers.
On iDEN technology, which powers Nextel phones, Jha said he sees
a modest decline in the business next year.
Co-CEO Greg Brown, who runs the home networks and enterprise
mobility businesses, said the company is focused on cost cuts. The
company expects to cut $1.9 billion from full-year expenses versus
2008, above the $1.8 billion it previously it projected.
Chief Financial Officer Edward Fitzpatrick said the company cut
its headcount by 9,700 for the year.
Sales in the home networks business is expected to be flat to
slightly down, as continued weakness in the housing market weighs
on the company, Brown said.
Enterprise mobility sales are expected to be higher in the
fourth quarter as a result of stimulus funds, which is starting to
flow to local governments, offsetting other areas of revenue
deterioration, Brown said. The overall environment is stabilizing,
he said.
Motorola shares rose 6.2% to $8.45 in pre-market trading.
-By Roger Cheng, Dow Jones Newswires; 212-416-2153;
roger.cheng@dowjones.com