Motorola Inc, the world's second-largest mobile phone maker, announced 3,500 job cuts on Friday after reporting a sharp fall in earnings because of an industry price war.
The US company's revenues surged by 17 percent to a record US$11.8 billion in the fourth quarter through last month, thanks to robust worldwide demand for the latest cellphones.
Motorola shipped a record 65.7 million handsets in the three-month period, up 47 percent from the same quarter of 2005.
But its net profits slumped 48 percent to US$624 million, as the company was forced to slash prices to keep up with competition for share of a market that is dominated by Finland's Nokia.
Motorola chief executive Ed Zander said he was "disappointed" with the quarterly earnings, before announcing the 3,500 layoffs.
The figure amounts to 5 percent of Motorola's global workforce of 67,000. On a conference call with industry analysts, Zander said it should generate savings of US$400 million over the next two years.
The Motorola boss said "we are assuming a traditional ASP [average selling price] decline," but forecast a "return to double-digit operating margin" in the second half of this year.
"We are doing the right things for long-term growth," he said.
The tale of Motorola's star model, the Razr phone, is emblematic for an industry that has been slashing prices to woo customers now that mobile phones have become ubiquitous in many societies.
Motorola launched the Razr in 2004 as a luxury model priced at US$500. But the phone, which did much to help the company take the fight back to Nokia, can now be found for less than US$50 in the US.
Zander insisted the Razr remained "much sought-after" but acknowledged: "The area where we are missing is a very strong 3G [third-generation] product."
Motorola estimated it had a 23 percent share of the global cellphone market in the fourth quarter, behind Nokia, which has also seen its earnings dip on the back of the price war.
Last week, US wireless operator Sprint Nextel announced 5,000 job cuts as it sought to streamline its operating costs.
Finnish company Perlos, which makes phone casings for Nokia, said on Monday it would cut 4,000 jobs, or a third of its workforce, worldwide by the end of the year.
And the market for tech-heavy "smartphones" is set to intensify with Apple's announcement last week that it will launch its long-awaited iPhone, in a bid to emulate the runaway success of the iPod music player.
Motorola said its net profits last year slowed 19.6 percent to US$3.7 billion compared to 2005, with annual earnings per share falling to US$1.46 from 1.81.
In the fourth quarter, its earnings per share came to 25 cents, generally in line with Wall Street forecasts.
The company expects sales of between US$10.4 billion and US$10.6 billion for the first quarter of this year, a marked decline from the record performance in the final three months of last year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy