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Fri, Nov 12, 2004 - Page 12 News List

Motorola expects robust handset sales this quarter

BLOOMBERG

Motorola Inc, the world's second-biggest maker of mobile phones, expects "very strong" handset sales this quarter, an executive said.

Sales of new types of phones are helping the firm meet its handset sales forecasts, Ron Garriques, who runs the company's phone unit, said on a conference call.

Motorola has overcome component shortages that hampered production last year and is able to meet demand for phones with built-in cameras and color screens, Garriques said. The handset unit generated 41 percent of Motorola's revenue last year. The Schaumburg, Illinois-based company will take market share this quarter as it introduces 20 new models, he said.

"Motorola is doing very well," said Albert Lin, an analyst with American Technology Research in San Francisco. Lin expects Motorola to sell 27 million handsets this quarter. Motorola doesn't make public its own forecast.

"Our phones were ready early in the quarter and in high volumes and that's why we're feeling bullish," Garriques said in an interview.

"There's a lot of people who haven't upgraded to a really cool phone yet and we're looking forward to them doing that soon," Garriques said.

Analysts and investors expressed concern that No. 1 phone maker Nokia Oyj's decision to cut prices to regain share would halt Motorola's share gains and stunt revenue growth.

As of the second quarter, Motorola chief executive Ed Zander, who joined from Sun Microsystems Inc this year, had reversed an eight-year market share loss. He introduced phones with clamshell designs that flip open to reveal a larger screen and take pictures.

Under former CEO Chris Galvin, who held the top job from January 1997 until the first of this year, the company posted losses of US$3.94 billion in 2001 and US$2.49 billion in 2002, and revenue fell from 2001 to last year.

Motorola's sales suffered last year when delays meant that some camera phones missed the holiday season.

After losing out on orders because the Finnish company didn't offer clamshell phones that became popular with users, Nokia added products, cut prices and regained some market share.

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