Moto Co-CEO Sees Mobile Unit Turnaround

Motorola Inc. (NYSE: MOT) expects its troubled mobile unit to begin turning around in the next quarter, according to the firm's co-chief executive Greg Brown, who is predicting a reduction in its operating loss.

Brown's comments were reported in an interview with the Financial Times, published Sunday.

"It would be our goal to... narrow the operating losses going forward," he said of the mobile unit's operation. "I would then be expecting Q2 to be... an improvement. That is our goal." Brown indicated that he expects a reduction in losses in the next quarter from the current quarter.

Brown's comments come just days after Motorola unloaded its Good Technology mobile e-mail software unit, fueling speculation that Motorola could abandon the mobile unit or merge it with another company. Motorola paid $500 million for Good Technology in an unsuccessful effort to compete more effectively with Research In Motion's enterprise e-mail service.

While Motorola may be de-emphasizing its mobile enterprise operation, Brown's upbeat comments indicate the company is likely to remain focused on consumer handsets. The Good Technology operation was sold to Visto Technologies for an undisclosed sum.

In a sense, Brown has put his money where his mouth is: He and co-CEO Sanjay Jha both purchased additional Motorola stock last month in symbolic confidence that firm will weather its current problems.

In Brown's interview, he said Motorola has found a way to profitability and even predicted the company could succeed in the nascent smartphone market.

Motorola virtually invented the modern mobile handset and even had a brief revival a few years ago with its Razr mobile phones, but it's been reeling from huge losses in recent months. Motorola recorded a $4.2 billion net loss for 2008 and has been losing handset market share rapidly to Samsung and LG in particular. Motorola's mobile unit had a $2.2 billion operating loss in 2008. The company's efforts to sell off the mobile unit last year were unsuccessful and it decided to hunker down in recent months and work to repair the ailing mobile operation.

— W. David Gardner, InformationWeek

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