Motorola Inc.MOT

Morningstar Rating

Stock Research and Analysis

by Joseph Beaulieu

Given the state of the economy and the recent performance of Motorola's handset business, we're not surprised that the long-awaited separation of money-losing mobile phones from Motorola's two profitable business units has been delayed. The handset Read more

Bulls Say

We think Motorola is likely to generate steady growth, improved margins, and positive cash flows without the handset business.

If Motorola's new Android-based smartphones prove to be popular, the handset business could be worth something to an acquisitor or as a stand-alone business.

Outside of the handset business, Motorola's product lines tend to have market-leading positions with little exposure to fickle consumers. Read more

Bears Say

Motorola's handset unit is bleeding market share and cash. At the low end, Motorola is getting trounced by Nokia NOK and the Asian handset manufacturers. At the high end, it is not clear that the Droid, the Cliq, and its successor products will gain traction in a crowded marketplace.

Motorola has made a heavy bet on the Android operating system, and while we think that Android could be a viable alternative to offerings by Apple and RIM, it is still in the very early stages of adoption.

High management turnover complicates an already difficult turnaround project at the company. Read more

Strategy

Motorola plans to split off its mobile phone business and focus its ongoing efforts on its two profitable business units. With those two remaining units, management is striving to increase its business Read more

Management

Motorola's executive team and board of directors have undergone significant changes in recent years. When Ed Zander took on the CEO role in January 2004, it marked the first time that someone outside the founding Galvin family was chosen to run Motorola. Read more

Profile

Motorola is the world's third-largest manufacturer of wireless handsets, which account for 40% of total sales. It is also a leading provider of wireless infrastructure equipment Read more

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