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Motorola, the world’s No. 2 maker of cell phones, lowered its forecast for quarterly results on Thursday due to a shortfall at its mobile devices unit.
The earnings warning made late Thursday fell far below Wall Street expectations and could be the result of a fiercer price contest between Motorola and its larger rival, Nokia, as well as a greater reliance on emerging markets where cheaper handsets are sold, analysts said.
"This probably means they’ve been trying to fight Nokia on pricing. It probably means Nokia’s going to see a similar trend–high unit volumes and low phone pricing and margins," said Charter Equity Research analyst Ed Snyder.
Motorola said it now estimates fourth-quarter sales of $11.6 billion to $11.8 billion, shy of its prior view of $11.8 billion to $12.1 billion, despite investor hopes for more robust sales from its slim Razr phone and new models like the Krzr.
"They probably cut pricing on the Razr and the other phones didn’t make up the difference," said Snyder.
Motorola also said it expects to report net income of 13 cents to 16 cents per share, below an internal forecast compiled at the start of the quarter.
Source: Reuters
Not Nokia news, but it’s reassuring to see that both Nokia and Motorola didn’t make as much as they were expecting.
Why is it reassuring? Because it means the industry slowed down, not what I thought it meant several hours ago: that Nokia is losing market share.
We heard Nokia say this at Capital Market Days a while back, this just proves it.
About The Author
Stefan Constantinescu
Stefan Constantinescu (@WhatTheBit on Twitter) has loved technology since as far back as he can remember. It started with computers, but in the past few years his passion has turned to mobile devices. As a mobile phone enthusiast who lives and breathes devices that connect to the internet, he knows he is not alone with this radical fascination of all things wireless. He is strongly opinionated and enjoys a good debate so leave comments in his posts and he’ll get back to you! Stefan began blogging as a hobby in the fall of 2006 and joined IntoMobile in the summer of 2007. Later he got a job at Nokia in March 2008, but as of June 2009 he has rejoined the IntoMobile team. He is currently based out of Helsinki, Finland.
