>>I have no idea if this might mean something to Zoom stock
price.
My guess is the negative comments won't help. But it's one less
competitor in the 'Flex camp. It sure says they don't expect
a windfall from K56Flex adoption.
Motorola Hires Goldman to Seek Buyers for Modem Unit (Update1)
(Adds that Goldman Sachs declined to comment in fourth
paragraph.)
Schaumburg, Illinois, Oct. 2 (Bloomberg) -- Motorola Inc.
hired Goldman, Sachs & Co. to seek buyers for its struggling
modem business, industry and financial executives said.
Motorola sent information on the unit to potential buyers,
including rival modem makers, said two executives who reviewed
the documents. The documents say that Motorola's Transmission
Products Division, based in Huntsville, Alabama, expects revenue
to fall 15 percent to $179 million this year, a modem industry
executive said.
Motorola declined to comment on the possibility of selling
its No. 3-ranked modem division, which has between 5 percent and
10 percent of the market. The company said last month that third-
quarter earnings will be 25 percent lower than analyst estimates
amid disappointing pager sales.
``Motorola is in the process of evaluating businesses from a
profitability standpoint,'' spokeswoman Shannon Clemens said.
Goldman Sachs declined to comment.
Motorola's retreat from the modem business would mean the
departure of a famous name and another step in the consolidation
of an industry where several of the smaller competitors have been
losing money. In April, Hayes Microcomputer Products Inc. bought
Cardinal Technologies Inc. Intel Corp. entered the modem business
early in the 1990s and exited in 1993 amid stiff competition,
analysts said.
``Motorola spent an awful lot of money to get the position
they have now, and it's a very tough business,'' said Eric
Zimits, an analyst at Hambrecht & Quist.
The division, which employs 750 people, includes brand names
like ModemSURFR, VoiceSURFR, and BitSURFR, Motorola's ISDN
digital modems.
Motorola's director of product planning for modems, Lisa
Volmar, said yesterday the division has had problems with big
inventory levels of 33.6 kilobit modems, an older version. Sales
of the new 56 kilobit modems have been held back by the lack of a
common international standard.
``It's hard when you can find a 33.6K no-brand modem selling
for $59,'' Volmar said. She declined to comment on whether the
company is considering selling the unit.
Motorola, which will report third-quarter earnings Monday,
is expected to earn 51 cents a share, up from 34 cents in the
year-earlier period, based on the average estimate of 29 analysts
surveyed by IBES International Inc. |
