Lehman Brothers Moto Takeaway from MWC 2008, Barcelona ...
From "3GSM Day 2 Observations" by Lehman's Jeff Kvaal, Stuart Jeffrey and Amir Rozwadowski dated February 13, 2008, after meeting with Motorola ...
>> Motorola: Ongoing Progress Towards 2H08 Product Refresh, First Option in Strategic Review is Restructure Internally: Despite Motorola's recent announcement that it is looking at strategic options for the phones unit, CFO Tom Meredith indicated that Motorola's first option remains to restructure the unit internally rather than find an external solution. Motorola's internal efforts are well underway and geared towards 2H08 and early 2009 - we detail some thoughts below.
• Motorola is, of course, looking at other options for the business - Mr. Meredith cited several joint venture discussions Motorola has held. Either way, Motorola is seeking to hire a high profile executive to lead the handset unit, either internally or externally.
• Our view is that Motorola may not have time to restructure the business on its own given the impending shareholders' meeting in May. We believe the difficulty of last year's proxy battle - and the results since - suggest Mr. Icahn's slate of directors has a good chance of winning this year should Motorola not act decisively. Mr. Meredith hinted that Motorola may not in fact be opposed to accepting shareholder representation on the board.
• In the meantime, the Motorola team continues to point towards 2H08 for the first products on the QUALCOMM AND Texas Instruments basebands. Motorola expects both in 2H08, though the QUALCOMM devices should arrive first. High profile phones are likely to include xPIXL (5MP camera), Texel (touch screen ROKR), and Skarven (widescreen camera with touch screen). QUALCOMM is set for the low to mid tier units and TI for the mid to high tier - suggesting that the volume is likely to drift to QUALCOMM. We do not believe that Freescale is in Motorola's long term plan.
• Motorola should return to the sub $30 phone market in 3Q based on TI chips - management is confident in its ability to be profitable at a $25 ASP. TI's ecosto appears likely to ship in 2009 - later than hoped.
• Motorola is in the process of slimming to three operating systems, Windows Mobile, Symbian, and Linux/Java. Ultimately Symbian may fall away, leaving two OSs. ###
- Eric - |
