Motorola eliminates 4,800 jobs in '08, phone share 'light years behind Nokia'

BY SANDRA GUY

Motorola, whose falling market share of cell phones has pushed it to No. 4 in the worldwide market, has more bad news to share, according to analysts and regulatory filings.

The Schaumburg-based cell phone maker, which reported 66,000 employees at the start of the year, reported that another 4,800 jobs had been cut in the first nine months of 2008.

The company's estimated market share for cell phones has fallen to 8.4 percent, according to Gimme Credit research analysts. That puts it "just behind Sony Ericsson, significantly behind Samsung and light years behind Nokia," in the words of Gimme Credit analyst Dave Novosel in his report Friday.

Motorola's cell phone division needs all the company's cash to survive as an independent company, and the money would last only two years. Novosel wrote in his note to investors that Motorola's free cash flow "continues to plummet" and estimates it will be a negative $500 million this year, the company's second straight year in the red.

New cell phones using Windows Mobile 6.5 won't be ready until the second half of 2009, and cell phones using the Android system won't be ready until holiday 2009. As a result, Motorola is expected to fall further behind in market share in the first half of next year, analysts say.

Source