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Motorola reports loss amid plummeting handset sales

Motorola posts $3.6 billion loss, mobile handset shipments halves from same quarter last year

Struggling handset maker and vendor Motorola has reported a loss of $3.6 billion for the final quarter of 2008, as the firm struggles to turn around the fortunes of its handset business.

Sales from the company’s Mobile Devices segment were $2.35 billion, a decline of 51% compared with the fourth quarter of 2007. Motorola sold 19.2 million handsets in the three months to end-December 2008, a sharp fall from the 40.9 million shipped in the same period in 2007.

The company said it plans to cut costs to save more than $1.2 billion in 2009, and announced the cancellation of its quarterly cash dividends on common stock.

“In light of the economic climate and challenges we face, we have implemented aggressive measures to reduce costs and improve financial flexibility, particularly in Mobile Devices. The cost-reduction actions underway are expected to generate aggregate savings of approximately $1.5 billion in 2009,” the company said in a statement.

Motorola, which is now trailing in fifth place in the global handset market, said it will concentrate more on mid-tier and high-tier phones, rather than mass market devices.

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