Motorola could halve handset workforce and product range
Published: 13 January, 2009
Motorola may be gearing up for drastic action in its handset division, with some sources indicating it could slash the unit's workforce in half this week, ahead of its results announcement at the end of the month. It is also expected to prune its already pared-down R&D roadmap still further, focusing on Android alone, at the expense of Windows Mobile, and producing just a dozen new models in 2009 - with consequences for its whole supply chain.
The reports of the imminent cull in the mobile devices division come from Phonescoop.com, citing internal sources close to the plans (the other two units, enterprise, and home and networking, will not be affected, and ironically both had good news to tell this week). Even if the actual details prove to be somewhat off, the credibility attached to the leak throughout the markets indicates how serious everyone knows Motorola's situation to be - and that radical action on the scale indicated is required if the company is to prove bearish analysts, predicting that it will crash out of the cellphone market this year, wrong.
Co-CEO Sanjay Jha, head of the handset division and lured to Motorola with the promise of the near term spin-off of the unit, must be in line for the prize for bad career move of 2008, having left a highly respected tenure as second-in-command of relatively safe bet Qualcomm for his new post. Now spin-off plans are a distant dream and Jha has to save the company, something he has already said he will do with a highly focused, cost effective R&D plan, based around Android and, secondarily, Windows Mobile. Now it seems the number of new phones will diminish even further to 12 per year (compared to 50-plus for Nokia and 25 for Samsung) and Windows will fall off the roadmap too. Motorola has already indicated it will defocus on Europe but more than halving its output of phones, at a time when its current line-up is exhausted, seems a desperate move - streamlining cost and resource, for sure, but risking an almost total loss of market impact.
On the more positive side, the other two divisions are looking more solid, especially the enterprise unit, which released the DCR-7X00-100R mobile payment system for retailers this week. Over at home and networks mobility, Motorola launched its next generation Multimedia Messaging Service Center, for cross-platform, cross-media content services, and signed Verizon as its first customer.
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