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Technology Stocks : Motorola (MOT)

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From: Eric L	3/2/2007 11:50:43 AM
	of 3436

Balancing Market Share and Operating Profit Q$ 2006 and CY 2006 Sell-In and Sell Through Share here ... Message 23334126 >> Motorola Rings In Cost-Cutting Changes To Enhance Profits Reuters 2nd March 2007 tinyurl.com The company plans to reduce the manufacturing costs for some of its cheapest phones in a bid to improve profits. Mobile giant Motorola aims to cut the cost of making its cheapest mobile phones by about $2 to $5 per handset to improve profits, according to its chief executive Ed Zander. Cost management will be a key part of Motorola's phone design process, he announced during an investor conference webcast yesterday. "We want to make sure our costs at the low end give us the profitability," he said. "Its not just materials costs, it's designing for costs," he said. Zander's comments follow weaker than expected fourth quarter earnings and revenue, which Motorola attributed to the lack of advanced mobile phones from the company and stiff competition for low end phones sold in emerging markets. Motorola trails only Finland's Nokia in the phone market. Chief financial officer David Devonshire had said last week that Motorola would turn its focus to profitability over gaining market share as the company was facing a "rocky" first half of 2007 before it sees improvements in the second half. Zander said Motorola would go so far as turning down business if a deal meant profits could be hurt. "We're actually going to turn down some deals. I don't know what it will mean for market share. I don't really care in the short term," he said, noting that Motorola needed to change its priorities. "Every time you fall off the horse like we did in [the fourth quarter], you don't just end up doing the same stuff," he said. "We've got to get discipline back that every product we make we make money on." ### - Eric -

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