A number of stocks did badly last week, but with the market up so much over the last two years, only a small number hit 52-week lows. One of those was Motorola (MOT).
The company’s struggles over the last three quarters and the constant downward revisions in the forecasts for its trouble handset unit have hurt the company. But, the most damaging aspect of Motorola’s fall is that Wall St. has gradually come to understand that things may not improve for several quarters–if they get much better at all.
Motorola is no longer a top-tier player. Nokia (NOK) now has a huge lead with about 35% of the global market and does even better in fast-growing markets like China and India. Motorola’s share has fallen far enough so that it is not a strong No.2. It has to fight with Sony-Ericsson and Samsung, and LG.
The Apple (AAPL) iPhone may not sell as many units as the larger companies, but it could help them at the lucrative high-end of the market. Having competition in the most profitable pool of handsets hurts.
There is almost no evidence that Motorola has any handset to allow it to replace the success of the RAZR. That being said, there is no evidence that the company can get back in game.
Douglas A. McIntyre
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