Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: John Biddle who wrote (31681)	1/24/2003 7:28:46 PM
From: John Biddle	Read Replies (1) \| Respond to of 196564

Motorola Aims High (And Low) With Phones Investor's Business Daily, Friday January 24, 10:48 am ET By Mike Angell biz.yahoo.com Motorola Inc. (NYSE:MOT - News) is tackling the high end and low end, the U.S. and overseas markets, in a bid to finally start gaining some worldwide cell phone market share. The company this month introduced eight new handset models. Carriers haven't said when they'll sell those products. The phones run the gamut from low-end mass-market phones to high-end expensive gadgets for taking photos and for Web surfing. The No. 2 cell phone maker's market share has hovered at 15% to 18% for several years. The new models are its latest attempt to gain on leader Nokia Corp., which has 35% to 38% of the market, according to most estimates. It's also Motorola's bid to avoid losing ground to aggressive, lower-ranked rivals. "This product launch was not only directed toward U.S. consumers, but also toward keeping its position in China and gaining more share in Europe," said Gartner Dataquest Inc. analyst Bryan Prohm. Motorola needs to recharge its phone sales. In the third quarter, sales at Motorola's Personal Communications Segment, which include cell phones and pagers, fell 2% from the year-ago quarter to $2.6 billion. But its sales rose 10% in the fourth quarter vs. the year-ago quarter, to $3.3 billion. The company blamed the third-quarter fall on declining pager sales. Excluding pagers, Motorola says the group's sales rose slightly. Motorola says it shipped 17 million handsets in the third quarter, 8% more than it did a year ago. In the fourth quarter, it says shipments rose 27% from the year-earlier period, to 22 million. The company says a general shift to lower-priced handsets is the reason shipments rose faster than revenue last quarter. Motorola says it has 18% of the cell phone market. That figure includes phones for the Nextel Communications network, where Motorola is the only option. Market trackers that discount the Nextel situation give Motorola about 15% market share. The one market Motorola dominates is China. Motorola says it has more than 30% of that market. But China recently opened its market to more entrants. It's granting licenses to South Korean phone makers like Samsung Electronics LG to start selling in China. Two of Motorola's eight new phones will be sold only in Asia. The rest will be available in any country, depending on which carriers decide to offer them. The more expensive models have all the latest features: built-in cameras for sending pictures, the ability to send text messages, color screens and Web browsers. Users will pay up to $500 for the high-end handsets. Wireless carriers typically subsidize all or part of the cost of handsets. High-end phones typically cost more than $250, low-end phones $100 or less. Motorola also is putting more features into its cheaper phones. Gerard Klauer Mattison equities analyst John Bucher says the new models could entice users to upgrade. Bucher doesn't own shares of Motorola, nor does Gerard Klauer do banking business with Motorola. "But if the phones are too expensive and carriers aren't offering much of a subsidy, that will limit the market," Bucher said. All of the new Motorola models have color screens, which Bucher says are becoming more popular. "We underestimated the popularity of color components," Bucher said. One new model, the C350, is an entry-level phone with a color screen. "It will be most competitive with Nokia's low-end phone," Prohm said. A couple of the Motorola phones also have Bluetooth technology. Bluetooth is a way to send data over short distances without wires. A Bluetooth accessory can add $60 to $100 to the cost of a phone. Bucher says Bluetooth, a long-hyped yet little-used technology, could finally find its niche with cell phone users. Bluetooth can make tasks like updating contact lists and transferring data between a phone and a computer much easier. Nokia and Sony Ericsson Mobile Communications, a joint venture of Sony Corp. and L.M. Ericsson AB, also have released Bluetooth-enabled cell phones. Two of the new Motorola models, the V295 and E365, include built-in cameras. While previous camera phone products were targeted to high-end users, these products are aimed at customers willing to spend $150 to $300 on a phone. Bucher says prices of camera-ready phones are falling faster than anticipated. Nokia, Samsung and Sony Ericsson already sell several camera-ready cell phones for less than $300. Bucher says less expensive phones with features like cameras and text messaging will be important for expanding the market. Motorola expects its unit sales of cell phones to rise 8% to 10% in 2003. That's about in line with most overall handset predictions for the year. Final 2002 numbers are expected to come in about flat with 2001. For the first time ever, cell phone sales fell in 2001, by about 5%.