Motorola’s woes continue as the company reported an 84 % decline in fourth quarter profits due to steep losses in its handset division as well as fewer shipped mobile phones. Motorola has slipped into third place globally for the handset market as no new popular handsets have yet to energize the company.

Motorola posted a net income of $100 million or 4 cents a share for the final quarter of 2008. This is down $623 million or 23 cents a share from the year ago quarter. Overall sales dropped 18.2 % – from $11.79 billion to $9.65 billion. The handset division had a horrendous quarter – posting a loss of $1.2 billion compared to an operating profit of $2.7 billion a year ago. Overall mobile sales fell 38% to $4.8 billion which makes up roughly 50 % of total sales for the quarter.

Motorola now commands roughly 13 percent of the overall global handset market – down from 23 percent in late 2006. The company has moved from selling handsets to all market segments to focusing on higher profit margin handsets which translates to lower overall handset shipments.

It will probably take Motorola some time to recover in the handset market as it typically takes time to design and create new handset models.

In the meantime, Motorola risks slipping in the global handset standings even more. Sony Ericsson, the number 4 handset manufacturer is right behind Motorola with 8 .8 percent of the market. If Motorola continues to slide even further and no new innovative handsets come out, you can see Motorola slide into 4th place and Sony Ericsson take over the third place spot. Sony Ericsson announced last week that their year over year handset shipment numbers increased by 18 percent. The company is clearly shipping more and more handsets at a good steady pace. What will be interesting is to see Sony Ericsson’s new 2008 product line – many of which will be optimized for U.S. networks (which are both GSM and CDMA).  If Sony Ericsson begins to take hold in the U.S. market, you can very see Motorola fall to fourth place if not further.

[Check it out]

[Check it out]

Technorati Tags: Motorola, Q4 2007