Motorola looks to broadcast video in taking on iPhone
Jeff Pao in Beijing
Mainland unit gets task of making handsets for niche service
Motorola (China) Electronics, the mainland unit of the world's third-largest handset maker, is to make mobile handsets that can receive broadcast video to compete against gadgets such as Apple's iPhone and reverse its parent's declining share of the global mobile device market.
'There is potential for growth in mobile video devices, including PDA-like mobile televisions or handsets that can download video data,' said Chuang Ching, the president of Motorola (China) Technology.
'3G phones cannot support real-time video programmes due to too-heavy bandwidth consumption, so we have to develop a separate channel, which is now called digital video broadcasting.'
Motorola China Technology is the research and development unit of Motorola China Electronics.
Mr Chuang declined to say when Motorola China's first mobile video broadcasting handset would be launched or to forecast sales.
Motorola, the company's United States-based parent, turned to a US$209 million net loss for the six months to June from a US$2.07 billion profit a year earlier.
Second-quarter sales fell 19.7 per cent to US$8.73 billion from a year ago due to worse than expected shipments of mobile devices, which dropped 31.6 per cent to 35.5 million units, as the company failed to introduce a device to compete with iPhone and new BlackBerrys from Research In Motion.
New models added to Motorola's Razr handset series failed to prevent Motorola's global market share plunging to 13.5 per cent during the second quarter from 22 per cent a year earlier. It lost the No2 global ranking to Samsung Electronics of South Korea, which sold 37 million mobile phones during the quarter.
The iPhone, introduced on June 29, offers functions such as a camera and a multimedia player, in addition to text messaging and visual voicemail. It also offers internet services including e-mail, Web browsing and Wi-Fi connectivity.
Motorola China will design products to different regional standards such as Europe's digital video broadcasting-handheld (DVB-H) and the mainland's China Multimedia Mobile Broadcasting, depending on customer needs.
Another standard that competes with DVB-H technology is Digital Multimedia Broadcasting, initially developed in South Korea, and first used there in 2005.
Motorola's revenue from its mobile devices segment, which accounted for 49 per cent of total sales, fell 40 per cent to US$4.3 billion in the second quarter with a segment loss of US$264 million. It earned US$804 million a year earlier.
The parent company will cut staff in an effort to save US$1 billion next year.
'We would like to have profitable growth instead of volume-driven growth,' Mr Chuang said.
'Mobile video and wireless broadband devices can help us to boost margins and improve net income.'
Motorola China, established in 1992 by Motorola, which came to the mainland in 1987, had 18 research and development centres and 25 branches offices, with 10,000 employees at the end of last year, including 3,000 engineers.
Last year, Motorola China reported sales of US$10 billion, about 23 per cent of the New York-listed parent's sales, which were about US$42.8 billion. The company did not provide other comparable financial figures.
Mr Chuang said Motorola China had completely localised its business and management team in the past decade and hoped to contribute more to the parent's global business in the future.
Nokia remains the world's leading maker of mobile devices, with second-quarter shipments up 10.6 per cent to 100.8 million units while Sony Ericsson is the fourth-ranked with about 25 million shipments.
Shares of Motorola, which have dropped 27 per cent from a year ago, fell 1.2 per cent to US$16.61 on Friday.