The latest profit warning issued by Motorola Inc. (NYSE: MOT) indicates the No. 2 handset maker could quickly loose ground to its closest rivals in the industry, analysts said Thursday.

Motorola is currently second only to Nokia Corp. (NYSE: NOK) in the handset market. The firm's warning yesterday, however, that its device unit is only expected to have shipped 35 million to 36 million handsets during the second quarter suggests that it could soon be overtaken by third-placed Samsung Electronics Co. Ltd. (Korea: SEC) and fourth-ranked Sony Ericsson Mobile Communications .(See Motorola Warns Again.)

"These volumes equate to 13.7 percent market share on a 260 million unit market and is likely to place Motorola behind Samsung Electronics which reports [Friday]," notes Nomura analyst Richard Windsor.

U.K.-based analyst firm Ovum goes even further. "It would not now surprise us to see Motorola overtaken both by Samsung and Sony Ericsson during this year, leaving it as the No. 4 supplier," says analyst Martin Garner. "If that happens we should also expect to see more redundancies and exits from certain areas of the market."

Motorola says that handset shipments are down for its ailing mobile device unit because of poor sales in Asia and Europe. The analysts note that the firm is trying to change that situation somewhat with devices like the Z8 multimedia phone, but chide the Schaumburg, Ill.-based networking giant for being too focused on the Americas.

"In our view the biggest single problem is the product portfolio, which is under siege in all segments across most of the world," notes Ovum's Garner. "One aspect of that is that Motorola has had a rather U.S.-centric view of what its portfolio should look like - fine for selling in the U.S., but not fine elsewhere."Motorola has consistently failed to find another device to match the success of its RAZR model. The slim phone helped to grow Motorola's revenues through 2006, but the company saw margins fall rapidly on the RAZR around the world.

Nomura's Windsor suggests that Motorola could now become more of a niche market player in the Americas, which might help to shore up the average selling prices (ASPs) of its devices. "While this strategy could work, helping ASPs and margins it will come at the expense of long-term growth as all the action remains in emerging markets," he opines.

In the midst of these problems, Motorola has finally found a permanent replacement for the head of the mobile devices unit, following Ron Garriques's departure in February this year. The new man is Stu Reed, lately EVP of the firm's integrated supply chain organization.(See iPhone Inspires Handset Headhunt.)

It is by no means all gloom and doom for the handset makers, though. Sony Ericsson reported this morning that it shipped 29.4 million phones for the quarter, up 59 percent year-on-year. The company estimates that the increase has grown its share of the market by three percent with increased shipments of high-end multimedia phones.

— Dan Jones, Site Editor, Unstrung