Motorola’s (MOT) shares are up almost 10% since late last month. RBS recently upgraded the shares due to a strengthening handset market and improved products, according to Barron’s. Cowen upgraded the stock last week.

Most of the improvement in the share price is based on two theories.

The first is that the overall demand for handsets is rising. But, Motorola may be getting no benefit from this, Its market share dropped from a high of 22% over a year ago to a current level of under 15%. Samsung and Sony Ericsson have taken a great deal of that business. And, Nokia’s (NOK) piece of the market is still growing, approaching 40%.

Even in a rising market, MOT’s market share may be continuing to fall.

The second line of thinking is that new models will replace the dying RAZR and help draw new customers. It may be a worthy theory, but that is all it is. Motorola has not proven that it can launch another wildly populare model.

Some analysts may be right. Motorola may have worked its way through an inventory backlog, which would be good news. But, it is not a sign of sustained recovery.

Douglas A. McIntrye

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