Motorola and Symbol: Off to a Rocky Start

Includes: GOOG, SBL
by: Joe Panettieri

As they wake up for work Thursday morning, Symbol Technologies (SBL) employees may feel like hitting the snooze button. Sure, many of those employees survived a corporate accounting scandal and fierce competition from Cisco Systems (NASDAQ:CSCO). And life was supposed to be just dandy once Motorola (MOT) acquired Symbol in January. But unfortunately, Symbol jumped in the car just Motorola's business was accelerating--toward a cliff.

No need to panic, folks: I believe that Motorola and Symbol will be fine over the long haul. Together, the companies still pack a powerful portfolio of mobile devices, barcode technologies and WiFi gear. But things are going to be really difficult for the next few quarters.

On March 21 Motorola replaced its CFO and slashed Q1 financial expectations amid fierce competition in the handset market. If Motorola wants to reconnect with customers, I suggest that the company place an urgent call to college kids. In particular, it's time to get serious about dual-mode phones that support WiFi and cellular connections.

Those dual-mode devices will become wildly popular on college campuses, where kids will increasingly use WiFi networks rather than cellular systems for phone calls.

MOT 1-yr chart


Disclosure: Author has no position in the above-mentioned companies.