Manufacturer updates

Motorola has been floundering for the past 6 months; handset sales for Q1 of '07 were 15% down, and it has incurred an operating loss of US$ 231 Million. All this, while Nokia and Sony Ericsson are enjoying healthy profits on the back of successful handset ranges.

We have often talked about the root causes of this dismal performance, and it is no secret to anyone that the Motorola range of handsets is getting "geriatric"! A pity when you consider how much momentum they had with the RAZR, and how they missed a golden chance to build on that success.

Now all this turmoil is but a potential golden opportunity for investors to buy on the cheap - eg. Carl Icahn, who has accumulated up to 3% of Motorola stock, but failed to secure a seat on the Board. On the other hand, competitors may be interested in buying up the group. We have heard of rumors that Ericsson is considering placing a bid for the entire Motorola group. They could then merge the equipment division with their own, and spin-off the handset operations, iust like they did with their own handset division 6 years ago. Still these are unconfirmed rumors; watch this space for any further development.

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