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In recent years, however, the market landscape has changed. Smart phones like the Blackberry, iPhone, and Treo have taken share. A slew of Asian manufacturers have also played a role, with Samsung, LG, and Sanyo (SANYY.PK) selling far more phones in the U.S. than they ever have before. As a result, MOT has seen cell phone share sag, profits plummet, and a stock price of about $9, down 65% over the last two years.
With the help of activist shareholder Carl Icahn, Motorola has been persuaded to split up the company. The cell phone business is bleeding red, distracting investors from the company's profitable home and enterprise broadband and mobility divisions. In 2007, the cell phone business lost $1 billion on sales of $19 billion. The other business lines (cable modems, set top boxes, etc) actually earned $1.9 billion on revenue of $18 billion. Few people probably realize that cell phones are only half of the story at Motorola. Perhaps a spin off will help with that.
Down
around $9 per share, I couldn't help but want to take another look at
the stock. Along with a market value now of only $22 billion, MOT
actually has net cash of more than $4 billion, or about $2 per share.
I'll share some of my numbers with everyone in coming days, but until
then feel free to share your thoughts on Motorola as a value play down
here in the single digits.Full Disclosure: No positions in the companies mentioned at the time of writing.
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This article has 3 comments:
Nokia has so many more models with different takes and not just in model size provides a model for everyone. They also issue new models regularly may be because they have a market orientated product development team.