Restructuring by Motorola Inc. (NYSE: MOT) will affect Motorola Israel's mobile devices division. Sources inform ''Globes'' that the division will be restructured over the next three months, and that many employees will lose their jobs. Motorola Israel's mobile devices division currently has 40-50 employees, and it is not yet clear how many will be let go, but the sources say that the number is large.
Motorola Israel's mobile devices division sells mobile telephones and peripherals and provides services to operators. Motorola's restructuring will result in the division focusing on sales, services, and engineering, and that operations will be outsourced. Other activities will also be outsourced following discussions between Motorola Israel and its parent.
Motorola Israel says that the restructuring is due to changes at Motorola Inc., especially the pending split later this year of the mobile devices division into two divisions, one for mobile telephones and home access products, and the other for networks and enterprise solutions. Motorola Israel's mobile devices division will become part of the new Motorola mobile telephone division.
2009 and the first quarter of 2010 were among the worst times for Motorola Israel's mobile devices division, as well as for its peers in other countries. Motorola's mobile telephones have been losing ground worldwide in recent years, resulting in the present restructuring in an effort to save the business. Although Motorola has launched several interesting mobile telephones in the past six months, including the flagship Milestone, the company has not been able to regain markets, either in Israel or elsewhere. In Israel the Milestone is only available at Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL).
For years, Motorola was the world's second largest mobile telephone manufacturer after Nokia (NYSE; LSE; HEX: NOK), but is now somewhere between 6th and 10th place. While Sony Ericsson, Samsung Electronics Co. Ltd. (KSX: 593), and LG Mobile Ltd. are still challenging Nokia, Motorola lost its edge and market share. New smartphone players such as HTC Corporation (Taipei: 2498) and Apple Inc's (NYSE: AAPL) iPhone have grievously hurt Motorola, especially in its US home base.
Published by Globes [online], Israel business news - www.globes-online.com - on March 23, 2010
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