Filed under: Analyst reports, Forecasts, Bad news, Industry, Competitive strategy, Motorola (MOT), Nokia Corp. (NOK)

No matter how badly Motorola (NYSE:MOT) has done in the handset business, it has managed to keep its spot as the market share leader in its home base of the US but that may change. According to The Wall Street Journai, “Motorola’s U.S. cellphone sales are dropping so sharply — and Samsung is catching up so quickly — that the South Korean company may soon knock Motorola from the perch it has held in the U.S. since it invented the cellphone in 1983.”

What can be said? Motorola has been losing market share for the last two years and there is no reason to believe that it can reverse that trend. When its RAZR was selling well, it had 22% of the global market. Now that number is closer to 14%. Nokia (NYSE:NOK), the leader, has 39% of the global market.

The market share figure is not just a number on a piece of paper. It may result in making the spin-off of the handset unit to shareholders more difficult. After pressure from Carl Icahn and other investors, Motorola will split the company into two pieces. One will have the handset assets and the other the home products, enterprise, and government sales operations.

There has been some speculation that the handset part of the company is worth nothing. Motorola tried to sell the operation last year. As far as anyone knows, there were no buyers. The company’s shares now trade for $9.55, down from $26 in October 2006. Almost all of that loss in value comes from problems in the handset operations.

When shareholders get their handset division stock in the spin-out, they will be lucky if they are worth $1.

Douglas A. McIntyre is an editor at 247wallst.com.

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This entry was posted on Saturday, April 26th, 2008 at 1:15 am and is filed under Industry News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.