Motorola skips dividend amid $3.6 billion loss

05 February 2009

Once the largest wireless handset maker, Motorola is struggling to keep its head above water with formidable problems to overcome as sales fall and product lines taking a beating in the market. According to analysts the one time icon of advanced technology is in danger of becoming a shadow of its former self.

Quarterly financial figures released earlier this week show the that the company shipped 19 million phones in the fourth quarter, which was about 50 per cent of the number shipped a year earlier. The company that could be credited with invention of the cell phone, introduced 50 phones in 2008; the number may be halved this year.

For the sixth straight month, Motorola devices do not figure in the Avian Securities ranking of best-selling US wireless phones. It lost its US market ranking to Samsung. With a global share of 6.3 per cent analysts say the once major market player with a 26 per cent share could end up as a peripheral player.

The market-share losses and dearth of best-selling phones has severely hit Motorola's bottom line. The company posted a $3.6 billion loss, on costs associated with the ailing cell-phone revenue slumping 26 per cent, to $7.1 billion. The company also skipped its dividend.

However, there are bright spots in the company's government, government, enterprise, and home-based equipment divisions, which have been largely stable on performance.

Motorola is now trying to make the best of its diminishing prospects with CEO Sanjay Jha driving plans to make Motorola's phone business smaller but more relevant and profitable. The company is in the midst of restructuring with 5,000 jobs to go by the end of the year.