Vincent Neil

Motorola Company revealed a few days ago, would cut down 7500 people, in order to reduce by 1 billion dollars of expenses. And plan to research and develop the cost quarter to cut down by 15%, raise and research and develop efficiency, to help the mobile phone business to make profits again.

Motorola high tube promises, should be through introducing the cellular telephone new product of a series of innovation but not excessive way to depend on the concentrate on one thing only product, draw this company out in severe decline at present. After going through one -year long turbulence and selling depression, the share on market of the whole world mobile phone of mobile phone business of the largest scale of Motorola had already been dropped from 21.9% one year ago to 14.6%. Many research institutions think, it has already lost the position of the global mobile phone second, exceeded by Samsung.

July of this year, Motorola announced the second wealth achievement in season, net deficiency is 28 million dollars, and the sales volume of mobile phone glides 40% by a wide margin. Meanwhile, Motorola also announces, this year it no longer expects its business of mobile phone can make profits.

Analyst and investor criticize Motorola for taking action slowly, especially there are no great movements after the iPhone cell-phone of the apple go on the market. Newly appointed president's picture Reed in Sri Lankan (Stu Reed) of mobile phone department of Motorola Company Show company plan before the end of 2007 until mobile phone research and develop, cut down by 15% by raising earning power by expense quarterly. Will consider the impact on new product development too while seeking the cost and saving, attempt to remake profit through adjusting the new developing market strategy at the same time.

Motorola CFO Tom and Meredyth (Tom Meredith) Show, all departments of Motorola will realize and make profits next year, including the mobile equipment department. Raise the intersection of operation and the intersection of profit rate and Company and shorten the time that product will invest and cashed.

He reveals, the company will reduce the turnaround time of fund to 25 days in order to increase the cash flow from 50 days, and shortening one day each time can increase the cash of 85 million dollars. He thinks, if purchase the spare part the listing time of mobile phone, shortens to 4~8 weeks from present about 6 months, then the profit rate of operation can be raised by 4~6 percentage points.

RBC Capital Markets analyst stops (Mark Sue) mark Have an optimistic view of the efforts of Motorola, claim Motorola is in the mobile phone division of the predicament to move towards steadily. But he think don't expect, it resumes to be can quickly rapidly, Motorola recover lost market share and profit situation to improve it also need to spend time. Most new products estimate that will not be introduced to the market before 2008.

Not plucked instrument (Dave Novosel) of Gimme Credit analyst Dave's promise Claim in a report given to investors, cutting down the cost can't solve the subject problem, this company needs to introduce attractive mobile phone products, should both do it in this way in U.S.A. and other countries.