Motorola phones suffer watershed sales decline in Q1

By Tim Conneally, BetaNews

April 24, 2008, 12:53 PM

Motorola posted a sharp 39 percent annual decline in mobile device sales and revenue during the first quarter of this year, but a company restructuring plan is looking to bring sales back into control.

During this quarter, Motorola decided to "pull the chute" on its plummeting mobile division and create two discrete publicly traded companies. President and CEO of the Schaumburg, Illinois company Greg Brown said that improvement of the mobile product portfolio is a prime concern.

The company sent six devices to market during the first quarter of the year, which included a new ROKR PMP-phone, the HSDPA MOTO Z9, and the MOTO Q 9c, it looks like the direction Motorola may be headed will include feature phones such as the Z9 with smartphone functionality.

Some of that smartphone functionality will be provided by VLX for mobile handsets, by VirtualLogix. Its software makes it feasible for mobile devices to run two operating systems. Motorola on Monday announced that it had made an equity investment in the virtualization company.

The soon-to-be spun-off Motorola mobile unit will feature overhauled product and "go to market" teams, one of which is a department to be headed by John Cipolla, (VP and former general manager of the CDMA systems division) focusing solely on the Mid-and High Tier product line.

During this restructuring, mobile device sales totaled $3.3 billion, which represented an almost 40% drop year-over-year, with 27.4 million handsets shipped. Operating losses were $418 million, a $185 million increase from the same quarter last year.

According to CEO Brown, "Positioning both businesses for future success remains a top priority. Our Home and Networks Mobility and Enterprise Mobility Solutions businesses continue to expand their portfolios of solutions, grow internationally and deliver solid financial results."