Analyst: Motorola may exit handset business

Hey, that's what Nomura International analyst, Richard Windsor, told his clients in a note published this morning. Instead of handsets, Moto may choose to refocus on becoming an "enterprise and government company." While on a roll, Richard also raised speculation that a Chinese company might scoop up the troubled Moto before calling it "unlikely as those vendors don't have much of an idea how to fix Motorola's problems." Problems he attributes to the platform and software, not hardware. Man Moto, what a long hard fall it's been since your 2005 RAZR heyday.

[JAmerican @ Jan 29th 2008 7:02AM]

Yea, they are just embarrasing themselves. I mean they released popular products that were either too slow to use (Razr) or didn't last half a day (Moto Q).

JAmerican

[Homeboy @ Jan 29th 2008 7:14AM]

I agree. Although the RAZR was insanely hot when it came out it was a pretty crappy phone. The same goes for most on their phones. they are slow, the UI sucks and they are lacking in specs and features.

[Slawek @ Jan 29th 2008 8:33AM]

Double agree. I've always said they made decent looking phones, but their software has always been slow/lacking. I went on a tour at Motorola in Shaumburg, Illinois. They had a full display of "future" phones. I found most of them to still have the slow software. I even mentioned it to the tour guide.

Anyone ever get sick of the 3 side buttons on the razr,v300, etc.? My damn v300 in my pocket kept changing sound profiles in school, had to glue them.

[Drew @ Jan 29th 2008 9:18AM]

I've got to disagree. The Razr was a great *phone*, it just wasn't a very good *gadget*.
For my use at the time, I needed a cell phone that was just a solid reliable cell phone. And it worked wonderfully for that.

[Andrew @ Jan 29th 2008 1:25PM]

I'm actually a big Moto fan. I'm a cheapskate so I always get the free phone when my contract renews/expires, and I remember ~4 years ago I got a V300, and it came with a standard USB port on it, AND supported MP3 ringtones. I had friends with more expensive phones who envied my custom ringtones and didn't want to pay the $70 for the proprietary hookup for their phones. Moto has continued putting the standard USB port on their free phones, and I've continued using them. You can't even get ringtones on an iPhone for free without some hacking :-P

[JCA @ Jan 29th 2008 2:21PM]

I used to work at the ill-fated Motorola. They are an outstanding hardware company. They are an absolute craptastic software company. Manufacturing isn't their forte either but thats another conversation. The general user could never know this but the hardware had plenty of horsepower actually....its just that the software was so poorly architected and bloated with legacy support that the user experience sucked.

The cellphone business is their bread and butter. Public safety equipment or their infrastructure businesses don't have the sales volume to support the current revenue. Their automotive business could've been more profitable had they given it a little TLC.

If they do exit the handset business instead of just selling it off....there are going to be a sh!t load of laid-off folks. Yikes.

[Abuzar @ Jan 29th 2008 8:32PM]

Yeah as far as a Phone goes, the RAZR was excellent. The battery life wasn't bad, the reception was good and it looked nice as hell back then. It was a good phone, but not much more.

[Ricardo @ Jan 30th 2008 5:00AM]

Couldn't agree more.

I have a A1200i, which has really great and stylish hardware, with a beautiful, sharp and colorful touchscreen. And a transparent flip, which I think was an excellent idea.

But the OS is the very crappy EZX, based on Linux, with no official support for native apps. There are only a few dozens of them, and most of them are really amateurish. All official apps are Java, which makes the 312 MHz processor work like it is 33.

Linux + Java is a very bad idea, too bad Google doesn't think so.

Anyway, even if Motorola doesn't go out of business, I'll never buy a phone from them again.

I do have the S9 headset and it's just wonderful though, because it's mostly a hardware product. Too bad the EZX platform has serious issues with A2DP, so ironically if you want to make the most out of the headset you have to use a non-Motorola streaming device.

[soul7963 @ Jan 29th 2008 7:02AM]

Best use of MS paint ever.

[tadghostal @ Jan 29th 2008 10:35AM]

lol. I doubt enGadget uses MSPaint, being the Apple fanboys they are.

[soul7963 @ Jan 29th 2008 11:12AM]

I am an Apple user (possible fanboy). I still have respect for MS paint.... best program they ever built!!

[Ipaq3115 @ Jan 29th 2008 12:50PM]

or gimp

[B @ Jan 29th 2008 1:41PM]

I think it might be a toss up between paint, notepad, and calculator... all 3 are in my quick launch

[Alex @ Jan 29th 2008 7:21AM]

Exit the handset business..... and then do what?

[Jason @ Jan 29th 2008 8:34AM]

Cable TV STBs? Cable Modems? They are also a huge player in public safety communications systems. I would imagine that supplying radios to police and fire departments is much more profitable than trying to compete in the crazy cell phone market.

[Randy @ Jan 29th 2008 9:12AM]

Um, they still have the chip fab business.

[mike @ Jan 29th 2008 9:38AM]

@Randy

They haven't had a chip fab business since they spun off Freescale semiconductor is 2003/2004.

[VampireHunter Z @ Jan 29th 2008 11:15AM]

What they should do is quit making cable boxes. My Comcast box is the biggest load of crap. The thing is bulky and there is no HDMI.

[DSeaver @ Jan 29th 2008 12:57PM]

Don't forget they supply the headsets to the NFL

[raptorspike @ Jan 29th 2008 7:23AM]

yeah, i remember the days when motorolas were the thing in cell phones. But i've had two since i got my first cell (c332 and v3m), both had HORRIBLE battery life. like 20 minutes talk time in some cases

[Samo @ Jan 29th 2008 7:25AM]

LOL at the picture!

It's a shame they're exiting the handset market. After all, they were the first people to make a mobile phone call (and called their rivals landline to prove it!). You could say they are the grandaddies.

However, I didn't like their phones much, so can't say I'm too sorry to see them go...

I agree with Alex too, "enterprise and government company" doing what?

[Atlanta Resident @ Jan 29th 2008 11:14AM]

Just about every police officer or fire fighter is carrying a Motorola walkie-talkie. And Motorola just bought Symbol last year, so all those laser scanners the FedEx guy uses are now Motorola products too. From their Q4 report last week, their goverment and enterprise group is like the best money maker they have

[Lifelion @ Jan 29th 2008 7:32AM]

Just a rumor

[Crayola @ Jan 29th 2008 7:33AM]

Buy! Buy! Buy! I say, those Capitalist Socialist high with lead poisoning just like a bargain, expect rumors like this to jolt the stock price, I bet there are half a dozen suitors, hope it will will be a Lenovo IBM match-up, then Acer TI disaster.

Just a question? What the hell MOT does these days, since its heyday of Walkie Talkie, Satellite Phones, Semiconductors, test equipments... Even being an enterprise company is a uphill climb with serious competition.

[Kuroyume @ Jan 29th 2008 7:48AM]

they need to start making more phones with the new Linux-java platform. Motorola has the design thing down, and as long as they can leverage their new platform i can see them going back to the top.

[Ricardo @ Jan 30th 2008 5:04AM]

The whole Linux-Java thing is the reason for Motorola to fail so miserably compared to real PDA phones. Yes, it started using it much earlier than Google, and it also failed already.

[TZK @ Jan 29th 2008 7:49AM]

It dosnt make much sense since they exceeded HTC and are neck and neck with samsung on MS phones in the US. (info from newswire)

Motorola does lots of R&D, so it isn't like they will be bored if they leave the cell business. Maybe Lenovo should pick that up as well :)

[Sybcri @ Jan 29th 2008 7:56AM]

The US is barely 15% of the global phone market. Doing good in the US doesn't mean you're doing well overall

[AlanJC @ Jan 29th 2008 8:17AM]

You lose.

They are only ahead of HTC on non-touchscreen WM phones, this does not include non phone PDA, or touchscreen smartphones, which HTC makes roughly 50% of worldwide.

The non-touchscreen market is peanuts.

[Doze @ Jan 29th 2008 8:49AM]

Your not serious right? When your talking about global dominance there isnt anything else than Nokia(40% of all phones sold last year where Nokia's). When your talking about smartphone dominance Nokia has 72% market share of all sold last year. Nokia havent had TS phones since 2003-2005 thought of course the s60 ts is coming this year.
Nokia has eated most of the Motos revenues and in smaller scale so have Samsung.
Moto is settled in NA and tries to scope with their 2005 desing, crappy OS and low features.

To be global player agen it really needs new Razr like device and currently i dont think they can do it.

[AlanJC @ Jan 29th 2008 10:38AM]

Doze, nobody mentioned Nokia, we're specifically talking WM touchscreen and non-touchscreen phones.

HTC are still the #1 manufacturer for WM touchscreen, and #2 for non-touchscreen.

[Rich @ Jan 29th 2008 7:56AM]

I love these "analysts", they really know what they're talking about.

Exit the handset business? No. Spin it off, ala Ericsson? Possibly.

[Stu L Tissimus @ Jan 29th 2008 8:21AM]

I know, it's hilarious. I'd love to get paid for making outlandish statements.

[Andrew @ Jan 29th 2008 8:57AM]

Spin it off like Ericsson? More like spin it off like Sony! Sony-Ericsson is a joint venture because *Sony* was not profitable in the cellphone markets. Especially in Europe. Ericsson on the other hand is a huge player worldwide from phones to networks (#1 globally). Sony is the stronger worldwide brand so they used it. However the research and technology is mainly Swedish.

If you're from the US you might not know that Ericsson is one of the larger players in the massive European, EMEA and Asian markets. Remember the US cellphone market is weird (and small) compared with the rest of the world.

[n3rd @ Jan 29th 2008 11:42AM]

also a joint venture because ericisson lost all its plants..

[Motoroliani @ Jan 29th 2008 7:58AM]

Porcoddddddio, cazzo dite?! Ma ammazzatevi! W motorola.

[Todd @ Jan 29th 2008 8:27AM]

Sad. I am a big fan of moto, but damn, they have had their chance. Its not like they don't have the resources to compete. Even before the iPhone there were tons of opportunities to fast track great handsets direct to consumers, instead of kissing the evil telcos collective asses.

I have been participating in the whole Open Moko thing, and I encourage you all to do the same, plus with android on the horizon, maybe we can get back to the good old days of hacking handsets like we used to with BREW mots.

[patsy @ Jan 29th 2008 8:31AM]

Again?! It seems that Moto will announce quitting the biz every few years, only to still stick around and make crappy phones. Last time (a couple of years ago or so) didn't they announce that they would quit the marketing and concentrate on phone OEM and component manufacture? Sounds like an attention-seeking teen that threatens to kill himself every other day just to make an impression.

[Pastry Chef @ Jan 29th 2008 8:31AM]

First, they screw up their PowerPC business and, now, they're screwing up their handset business. Can't they do anything right?

[engadget @ Jan 29th 2008 8:55AM]

They do a lot more then selling cell phones? Hmmm let me see.. they sold off all the semiconductor groups, now On and Freescale.. they sold off the Government electronics group.. now General Dynamics.. they sold off the Embedded Computer group.. now Emerson Network Power... they dumped Quasar TVs, the radios and other consumer electronics a long time ago.. What's left? Cell Phones is the last remaining big ticket.. I don't think they're making enough on cable boxes and cable modems to survive for long. They've come a long way since the Motorola radio transmitted the first words uttered from the moon.. bummer is it's been the wrong direction.

[sheinin @ Jan 29th 2008 8:58AM]

I don't know what you all talking about. I have their v3xx phone which is great. It looks exactly like the first RAZR, but in fact it's 3.5 gen phone, with 3 days between re-charges (without BlueTooth on, 2 days with). It has great UI, 2 cameras, built in MP3 player and much more.
I glad I bought it, worth every cent.

[Asten @ Jan 29th 2008 11:52AM]

Agreed. I *love* my v3xx. The only way it's comparable to the RAZR is form factor, which I still love anyway.

[NeoteriX @ Jan 29th 2008 9:07AM]

Crapola. I just bought a Motorola Q9c and a boat-load of accessories.

[Brian @ Jan 29th 2008 9:36AM]

Once Nextel is gone (Sprint had to keep Nextel for five years, in order to avoid nullifying the contracts it had with retailers), IDEN will be gone, too.

Motorola is the exclusive producer of IDEN phones. (IDEN/CDMA/GSM... the three main channel access methods)

I find it hard to believe they aren't selling enough Q's (awful, awful phones) or RAZR's (up until the last two generations, while attractive, they are also very cheap and poorly made)... We wouldn't be losing anything if they went, but I don't they'd go without a last ditch effort.

[adrian @ Jan 29th 2008 9:43AM]

To exit after all these years seems like the cheap way out. They need to do some market research and find out what's going wrong, Hire some new talent then fight back. If their UI is the major problem then wipe the slate clean and start again.

[G Money @ Jan 29th 2008 9:53AM]

Moto has a VERY lucrative Public Safety Communications Business. They own 85% Market Share of that business. Cell Phone handset business is like the TV business. Very Low Margins. ANd very competitive. I mean APPLE revolutionized the phone, and their stock is down some 35% since reporting earnings of its first full quarter on sale. You do what you gotta do Moto!

[BobTurbo @ Jan 29th 2008 9:56AM]

Both their hardware and software has been total shit from since I have ever known them.

[Zip @ Jan 29th 2008 10:16AM]

I hope and dont belive that Moto is leaving. It would be -1 from the big 4(Nokia 40%, Samsung 14%, Moto 12% and SE 9%)and what we consumers want is competition.

[mrarmageddon @ Jan 29th 2008 10:20AM]

A cellphone with a bad UI? Blasphemy!

[Aber Sabeel @ Jan 29th 2008 10:50AM]

I think they would do everybody a favor! I got my last Motorola cellphone in 2000 and I never wanted more!! The menus were the most useless I've seen, problems with the signal, even it used to dial numbers in my pocket. It was the most awkward cell phone I've ever had. I heard they improved but apparently not enough.