February 27, 2009 / 12:38 AM / 9 years ago

Motorola sees cell market growth in 2010/2011

NEW YORK, Feb 26 (Reuters) - Motorola Inc MOT.N sees industry cellphone sales increasing in the mid-single-digit percentage range next year and in 2011, driven by first time buyers in emerging markets and upgrades to new models by existing users.

The company, which has been bleeding market share in its mobile phone business, said in its annual report, filed with regulators on Thursday, that it expects industry growth to resume after declining this year for the first time since 2001.

“Beyond 2009, we expect growth to return to the wireless handset industry,” it said in the filing with the Securities and Exchange Commission.

“We believe growth rates will be in the mid-single digits for the years 2010 and 2011, compared to the 15 percent (compound annual growth) experienced by the industry from 2004 through 2008,” it said.

Market leader Nokia NOK1V.HE said in January that it expected global sell phone sales to decline about 10 percent in 2009 after about 5 percent growth in 2008.

Motorola’s cellphone market share fell to 6 percent at the end of 2008 compared with a 22 percent share in 2006 as the company did not have the right advanced phones to meet carrier demands after its once-lauded Razr started to lose ground.

Pressure on the Schaumburg, Illinois-based company intensified once consumer demand weakened with the economy.

The company is hoping that new phones based on the Android operating system from Google Inc (GOOG.O) will help it start to improve its position again late this year and in 2010.

Motorola, which reported a fourth-quarter loss of $3.6 billion on Feb. 3, said the United States accounted for 44 percent of its cellphone sales in 2008, down from 46 percent in 2007. Its biggest markets in 2008 after the United States were: Brazil, China and Mexico.

    Aside from mobile devices, Motorola also sells network equipment and television set-top boxes as well as wireless devices for businesses and governments.

    The company said these business segements would also come under pressure from the weak economy in 2009 as government, enterprises and carrier customers cut spending.

    The company mentioned in its list of business risks that more than 40 U.S. states and many local governments face budget deficits in 2009.

    About 2 percent of Motorola’s 2008 sales were from contracts the U.S. government, including the armed services. The company said these contracts are “subject to cancellation at the convenience of the government.”

    It said it ended 2008 with about 64,000 employees down from 66,000 at the end of 2007. Since then, Motorola has announced a new round of 4,000 job cuts this year. (Reporting by Sinead Carew; editing by Leslie Gevirtz)

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