(Associated Press via NewsEdge) Motorola faces a 'rocky' first half of 2007 after going awry with its strategy in the fourth quarter, its chief financial officer said.
Motorola CFO David Devonshire told analysts that he expects the cell phone maker to recover in the second half, reiterating what CEO Ed Zander said a month ago when the company disclosed its weakest quarterly results since 2004.
Devonshire said he didn't know exactly why Ron Garriques had abruptly resigned as head of Motorola's cell-phone business last week to take a job with Dell, but 'clearly there was a (strategy) change that needed to be made.'
'The straight strategy for market share got us in trouble in the fourth quarter,' he said at Bank of America's technology conference, in remarks broadcast over the Internet. 'So we couldn't live with that strategy, we needed to change.'
Motorola ran afoul of investors and industry analysts with its disappointing fourth-quarter results, which it attributed to missed forecasts and errors in pricing its products. Now the company finds itself on the defensive after enjoying an unprecedented two-year hot streak because of the trendy Razr phone's worldwide popularity.
Devonshire acknowledged that one key problem was the decision to lower the Razr's price to mass-market levels, which made it and related phones less profitable.
He said that, contrary to what some observers may think, the Krazr has fared well as a successor to the Razr, selling over two million units in the fourth quarter and continuing to sell well.
Some Wall Street analysts have said a recovery won't be quick and questioned whether the company can return to double-digit operating margins in the second half, as Zander said last month.
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