Merrill Lynch thinks that Motorola (MOT) is not selling as many of its new RIZR phones as Wall St. would like. And, sales of its older RAZR seem to be slowing faster than expected. Barron’s quotes that brokerage as saying: “We believe [the first half] could be difficult, given the lukewarm reception seen by most of Motorola’s new products.” Merrill has a "neutral" rating on the stock.
The news is not too good for Motorola or its newest large shareholder Carl Icahn. The stock is already down 11% this year to $18.40.
But, the ripple from this could extend to chip companies like Texas Instruments (TXN) that have a lot of their revenue riding on a rebound at companies including Motorola and Nokia (NOK).
Cell phone sales are already forecast to grow less than 10% this year, after several years of double digit growth. The chip companies don’t need that problem to be compounded by low demand for Motorola’s new products.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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