Facing Up To Competition

Article Excerpt

MOTOROLA INC. $19 (New York symbol MOT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 2.3 billion; Market cap: $43.7 billion; WSSF Rating; Above average) has struggled lately in the face of strong competition in the mobile phone market. Growing sales of low-margin, entry-level phones have also hurt profits at this division, which accounts for 60% of Motorola’s revenue. The company is now focusing on higher-margin multimedia phones that can store and play back music and videos, and receive email. In July, it launched the Razr 2, the successor to its popular Razr phone. So far, the new model is selling well. Motorola may cut the price to spur sales during the busy Christmas shopping season. The company plans to launch several other new models over the next few months. Motorola has also formed alliances with several online music sites. The extra revenue from downloads should stabilize revenues, and help it compete with Apple’s iPhone. Due to the lower profits at the…