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.