Strategy Is Shifted at Motorola
CHICAGO, Sept. 7 (AP) — Motorola executives pledged Friday to break the company out of its deep slump by introducing a series of innovative new cellphones rather than a “one-hit wonder” like the Razr.
They had no new products to unveil at the company’s annual analyst meeting in New York, but promised some announcements next month.
On the defensive after a year of turmoil and subpar sales, Motorola’s leaders said they continued to cut costs. The latest reduction is a 15 percent cut in quarterly spending on research and development for mobile devices, which the unit’s new chief, Stuart C. Reed, said would make spending more efficient.
Motorola’s handset unit, its largest, has been struggling after more than two years of phenomenal Razr sales that fell off sharply starting last year.
This year, the company, based in Schaumburg, Ill., warned that the cellphone segment would be unprofitable until at least 2008.
In a research note after the meeting, Mark Sue, an RBC Capital Markets analyst, told investors not to expect a quick turnaround.
“It will take some time for Motorola to regain its lost market share and improve its profitability metrics,” he wrote.
Mr. Reed, who became president of the mobile devices unit five months after Ron Garriques quit abruptly in February, suggested that the company was not looking for a single mega-hit.
“We will not ride one horse to the bitter end again,” he said.
Investor Lawsuit Is Settled
Motorola has won final approval of a $193 million settlement with shareholders who sued it for failing to disclose $2 billion in bad loans to a Turkish company.
Judge Rebecca Pallmeyer of Federal District Court in Chicago approved the pact yesterday; it was first agreed to in May. The agreement resolves claims that Motorola did not tell investors about loans made to the Turkish cellphone company Telsim, from 1998 to 2001.