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Technology Stocks : Motorola (MOT) -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (2997)	11/30/2007 10:26:36 AM
From: slacker711	Respond to of 3436

If you ask me, MOT has to diversify a bit more away from relying so heavily on handsets (a la NOK). MOT is also a major provider of wireless communications and broadband systems. These are two fast growing areas. Motorola has done well with governmental systems but their wireless infrastructure division is depending heavily on WiMAX. That bet looks dicey right now with Sprint wavering on their commitment and Verizon's early announcement of LTE. I would assume that they will try to dislodge some of the incumbents in LTE (mostly Nokia and Ericsson) but that didnt work well with WCDMA so I dont know if I expect much more success this time around. A WiMAX world would clearly be better than a LTE based one for Motorola.... Handsets are basically a commodity. If this was the case, I would expect to see industry margins to be in decline from previous levels. Instead, outside of Motorola, all of the majors are experiencing their best margins in years. Some of this is due to Motorola's implosion, but the fact is that the the high-end of the market is doing very well right now....and devices like the iPhone and N95 clearly offer differentiation from the competition. You dont even need to look at the absolute high-end of the market to see this. LG has turned around their brand image with their Chocolate and Shine product families which are part of the "fashion" category of handsets. Motorola has the opportunity to provide some differentiation but they are going to need to stop making every design a RAZR derivative. It is easier to make the case for handsets being a commodity on the low-end, but even here, Nokia manages to earn a >10% margin. Price is a factor for low-end consumers but so is brand and design.....simply put, even in the poorest countries, few people want to be seen owning the cheapest or ugliest handset on the market. Right now, Motorola might be right to pull back from the low-end part of the market since they are having trouble competing, but over the long-term they are going to have to figure out a way to make a profit in this segment if they plan on having a sustainable share above 10-12%. Slacker

To: JakeStraw who wrote (2997)	12/4/2007 7:51:55 AM
From: Tom Caruthers	Read Replies (1) \| Respond to of 3436

I agree with that. After spinning off Freescale, they should have gone beyond phones in the consumer arena. I haven't seen any new product innovations come out of the company in a long time. That being said, it sounds like their CTO got the boot. I can't imagine Brown didn't already give his two cents on how to right this ship...so I'm not that confident that he's got what it takes. Also, filling in the CTO position with the chief strategist is also in my mind shuffling the chairs on the deck of the Titanic. I think Icahn with shake MOT to the core and create some real value. Tom