Articles for Motorola

Potential Upside to Motorola from Growing Mobile Phone Prices

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Friday, February 4th, 2011 by Trefis Team

Motorola Mobility’s (NYSE:MMI) mobile phone pricing was depressed from 2006-2009, hovering in the range of $120 to $140. But its average mobile price spiked to $200 in 2010 driven by the introduction of a series of smartphones like Cliq and Droid based on the Android operating system.

Motorola competes with Apple (NASDAQ:AAPL), Research in Motion (NASDAQ:RIMM) and Nokia (NYSE:NOK) in the mobile phone market. We expect Motorola’s phone prices to elevate in the near term and fall back to current levels by the end of Trefis forecast period. Trefis members however expect prices to reach $300, representing an upside of 12% to our price estimate for MMI stock.

We currently have a price estimate of $25.45 for Motorola Mobility’s stock.

Executing on iPhone and iPad Strategy in 2011 Would Carry Apple Past $500

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Tuesday, January 25th, 2011 by Trefis Team

Apple (NASDAQ:AAPL) recently announced its FY Q1 2011 earnings results, which were mixed with regards to our estimate though results did beat consensus estimates with $6.43 in EPS on revenues of $26.7 billion for this quarter against the consensus estimate of $5.38 in EPS on revenue of $24.42 billion. We nudged our price estimate higher by $2 that is now $420, which is about 20% higher than the current market price. Apple competes with phone makers like Research in Motion (NASDAQ:RIMM), Motorola (NYSE:MOT), Nokia (NYSE:NOK), and Google (NASDAQ:GOOG).

As we look at 2011, the story is largely still about the iPhone and iPad for us. The iPhone now accounts for 52% of our price estimate while the iPad has risen to just over 7%.

Can International Markets Compensate for RIM’s North American Market Share Losses?

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Tuesday, January 11th, 2011 by Trefis Team

Research in Motion (NASDAQ:RIMM) earns roughly 34% of its revenues from the U.S. but has seen its market share in U.S. smartphone sales decline over the past few years due to stiff competition from players like Apple (NASDAQ:AAPL) and Nokia (NYSE:NOK). Not only has RIM lost smartphone market share, but its share of the total U.S. mobile phone market has also taken a hit despite the advantage of surging smartphone sales.

However, RIM has started to make up ground in international markets, softening downside to the $68.92 Trefis price estimate for RIM stock, which stands about 10% above the current market price.

Samsung’s Rapid Rise Could Eliminate Upside for Nokia Stock

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Friday, December 31st, 2010 by Trefis Team

Nokia (NYSE:NOK) has witnessed its market share evaporate over the past few years, largely due to rising competitive pressure in developed markets from Apple’s (NASDAQ:AAPL) iPhone and Research in Motion’s (NASDAQ:RIMM) Blackberry. The company must now also fend off an increasing push in emerging markets from competitor Samsung.

We estimate that emerging markets constitute about 52% of the $12.46 Trefis price estimate for Nokia stock, which stands about 20% higher than the current market price.

Apple’s Sensitivity to iPhone Market Share

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Friday, December 31st, 2010 by Trefis Team

Apple (NASDAQ:AAPL), which competes with Research in Motion (NASDAQ:RIMM), Motorola (NYSE:MOT), and Nokia (NYSE:NOK) in the mobile phone market, has rapidly increased its market share from around 0.3% in 2007 to around 2% in 2009, and we expect it to increase to around 3.7% by 2010.

We estimate that iPhone constitutes around 53% of the $418 Trefis price estimate for Apple’s stock, which is about 22% above the current market price. Below we look at potential upside and downside scenario for Apple that focuses on its most important driver to its share price – iPhone market share.

RIM Can Lift Market Share, Stock Value with Enhanced Product Portfolio

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Wednesday, December 29th, 2010 by Trefis Team

Research in Motion (NASDAQ:RIMM) primarily competes with players like Apple (NASDAQ:AAPL), Motorola (NYSE:MOT), Nokia (NYSE:NOK) and Google (NASDAQ:GOOG) in the rapidly expanding smartphone market.

Our price estimate for Research in Motion stands at $68.92, implying an 18% premium to market price. The company’s stock has underperformed the broad based market year-to-date partially due to slow market share growth in the mobile phone market.

RIM has made conscious efforts in the recent past to improve its product portfolio, having made a few key acquisitions of companies including Cellmania, QNX and Astonishing Tribe to improve BlackBerry’s software design and performance. The company is also planning to introduce its new PlayBook tablet in the first half of 2011.

Will these efforts be enough to lift Research in Motion’s stock?

Mobile Market Share is Critical to Motorola’s Stock Value

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Monday, December 27th, 2010 by Trefis Team

Motorola (NYSE:MOT), which competes with Apple (NASDAQ:AAPL), Research in Motion (NASDAQ:RIMM) and Nokia (NYSE:NOK) in the mobile phone market, has watched its market share rapidly deteriorate since reaching 22% in 2006. As of 2009, Motorola’s estimated mobile phone market share stood below 5%, and we project further declines to under 2% by the end of our forecast period.

We estimate that Motorola’s mobile phone operations generate roughly 29% of the company’s stock value. Our price estimate for Motorola is $8.30, roughly 8% below market price.

Mobile Phone Market Share is a Key Driver to Motorola’s Stock Value

Mobile phone market share remains the most critical driver to Motorola, as this segment generates the largest single contribution to the company’s estimated stock value (at 29%). As a result, small swings in projected market share create large fluctuations in Motorola’s intrinsic value. Below we examine potential upside and downside scenarios for Motorola stemming from this key driver.

Nokia Faces Diminishing Market Share from Operating Speed-Bumps

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Thursday, December 23rd, 2010 by Trefis Team

Nokia (NYSE:NOK), which competes with Apple (NASDAQ:AAPL), Research in Motion (NASDAQ:RIMM) and Motorola (NYSE:MOT) in the mobile phone market, has lost share in developed markets like the U.S. and Europe over the past few years.

We believe the market share loss was caused by insufficient focus on customer needs, delays in introducing new operating systems, and incompatibility with networks of telecom operators. We expect Nokia’s share in developed markets to fall further over the coming years.

Despite weakness in the company’s developed market growth prospects, we maintain a price estimate of $12.44 for Nokia, roughly 22% ahead of market price. Nokia generates an estimated 53% of its value from emerging markets (vs. 17% from developed markets), limiting the impact of downside to its developed market operations.

Qualcomm – 20% Upside from Mobile Phone Market Growth

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Monday, December 20th, 2010 by Trefis Team

Qualcomm (NASDAQ:QCOM) sells mobile chipsets and provides its CDMA mobile phone technology to companies like Motorola (NYSE:MOT), Samsung and LG. According to a recent report from Gartner, the mobile phone market grew by 35% in Q3 2010 over Q3 2009, which might indicate that the mobile phone market is trending towards faster growth in the future.

We estimate that Qualcomm’s mobile phone chipsets business constitutes around 44%, with mobile phone royalties adding another 31% to our price estimate for Qualcomm stock. Qualcomm competes with players like Broadcom (NASDAQ:BRCM), Texas Instruments (NYSE:TXN) and Infineon Wireless, which was acquired by Intel (NYSE:INTC). Accelerating growth of the mobile phone market would be a positive for all these players.

Currently, we forecast an average annual growth of 6% for the mobile phone market. However, if this market continues to grow at an average rate of 10%, there could be an upside of more than 20% to the $50 Trefis price estimate for Qualcomm stock.

Apple’s Gross Profit on Mobile Phones is Double RIM and Motorola’s Combined

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Thursday, December 16th, 2010 by Trefis Team

We wanted to take a quick look at how the gross margins for Apple’s (NASDAQ:AAPL) iPhone compared to Research in Motion’s (NASDAQ:RIMM) BlackBerry and Motorola’s (NYSE:MOT) mobile phone business to see the marginal impact of each additional device sold by these companies. In other words, for each person that buys an iPhone or Blackberry, what does this contribute to the company? By looking at the individual sale, we can look past the R&D and total investment in each product for this exercise, which we acknowledge is a large component to most tech companies.

In just looking at gross margins for 2010, we estimate that Apple’s iPhone’s is around 49%, RIM’s Blackberry 35% and Motorola’s is approximately 28%. We derived these by using our estimates for the gross profit margins for the mobile phone divisions of each company.

Our result is that Apple’s iPhone generates just under $15 billion in gross profits, which is more than double our estimates for Motorola and RIM with just over $2 and 5 billion, respectively. Below we provide some reasons why Apple can earn roughly double per unit sold than two of its competitors.