Videocon Signals Interest in Buying Motorola Phone Unit
By Mike Caggeso
Associate Editor
Less than a week after Motorola, Inc. (MOT) announced its split into two publicly traded companies, India’s Videocon Industries Ltd. said it is interested in buying Motorola’s mobile-phone business.
"We are in consumer durables, we are in retail and we also have" mobile-phone licenses in India, Videocon Chairman Venugopal Dhoot said in an interview with Bloomberg News. "We are very, very interested."
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Not only is Videocon interested, it is well positioned to turn Motorola’s slumping sales into profit in India, the world’s fastest-growing mobile-phone market. Dhoot said Videocon, which secured wireless licenses earlier this year, plans to begin offering mobile-phone services in India by the end of 2008.
A quarter-century ago, Motorola pioneered the mobile phone. But in recent years, increased competition has taken a large chunk of its customers, who have instead opted for products from market leader Nokia Corp. (NOK), stalwart Samsung Electronics and hyped newcomer Apple Inc. (AAPL).
Last Wednesday, under mounting pressure from billionaire investor Carl Icahn, Motorola announced it would split into two companies in 2009. Analysts said the split would put the company in a better position to sell assets or negotiate a joint venture.
Videocon is India’s largest consumer electronics maker. Its lineup of televisions, refrigerators, air conditioners, audio equipment, microwaves and more account for a 23% share of India’s consumer electronics market, Bloomberg reported.
Notably missing from that list, however, are cell phones.
Motorola’s fourth-quarter profit was down 84% from declines in sales of its phones and handsets, one of the many problems that induced top management to give investors a sober analysis for 2008.
"We are focused on aggressively rationalizing the company’s cost structure and working to get Mobile Devices back on track," said Greg Brown, president and chief executive officer of Motorola. "The recovery in Mobile Devices will take longer than expected and there is a lot more work to be done."
Motorola is also reportedly in talks to combine with Nortel Networks Corp. (NT), which would result in a joint venture valued at $10 billion.
News and Related Story Links:
- Money Morning:
Motorola’s Stock Drop on Sharp Fourth-Quarter Declines
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