During a conference call yesterday, Motorola Co-CEO Sanjay Jha laid out his plans to get the beleaguered Motorola back on track following disappointing Q3 results. Those plans included reducing costs, streamlining products and delaying a spinoff of the handset business.
The company reportedly plans to slash about 3,000 jobs, nearly 2,000 in the handset division alone. The company also will reduce its focus on certain markets, such as Europe, while stepping up emphasis in China and North and South America.
Jha said the company plans to reduce the number of operating systems the company employs in its devices. It plans to make low-end phones based on its own software and high-end phones that run Microsoft's Windows Mobile and Android software developed by the Google-led Open Handset Alliance.
In Q3, the handset division lost $840 million, up from $248 million a year earlier. Unit sales dropped 32%, to 25.4 million from a year earlier, and the company's market share plummeted to 8.4% globally.
The restructuring timed as it is with the worsening economy prompted Motorola to delay its planned spinoff of its handset division, which was originally set for next year.
Technology Business Research (TBR), a technology research company based in Hampton, N.H., said it believes Motorola had no choice but to delay spinoff plans because of macroeconomic concerns. However, it thinks the restructuring will actually benefit the division by increasing the value of its handset business.
“By mid-2010, the company is likely to see a handset unit which is much better equipped to take market share in its core segments, has a much lower cost structure, and will also be a much more attractive acquisition target for potential strategic investors,” the company wrote in a position paper.