Forex

Motorola Inc, one of the world's biggest mobile-phone maker till some years back and second biggest till last year, is in all likelihood set to fall to the fourth position. The company which will announce its last quarter results this week lost further market share to the Korean Electronics giant LG.

Nokia Oyj and Samsung Electronics have already passed the Motorola, and now with LG recording a 45 per cent rise in shipments to 27.7 million in same the quarter, it too is set to pip the US-based telecom company.

Motorola's slide to No. 4 has come almost six months sooner than analysts predicted, and calls into question the viability of Chief Executive Officer Greg Brown's plan to split the money-losing phone unit.

"I expected Samsung to pass them, but I didn't think LG would pass them as well," said Pablo Perez-Fernandez, an analyst at Global Crown Capital LLC in San Francisco. "The decline was much worse than I thought."



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Perez-Fernandez, who rates the shares "neutral," puts Motorola's market share at 8.5 per cent and LG's at 9.1 per cent. Interestingly, till two years ago, Motorola enjoyed a comfortable 22 per cent share.

Researchers at Strategy Analytics in Boston had projected in May that Motorola would fall behind LG by the end of the year.

Motorola, based in Schaumburg, Illinois, may report a widened net loss in the quarter to $76.1 million, or 4 cents a share, from $28 million, or 1 cent, a year earlier, according to a Bloomberg survey of 15 analysts.

They estimate sales slid 11 per cent to $7.7 billion, the sixth quarterly drop in a row. The company is scheduled to report its earnings before US exchanges open tomorrow.

In fact, Motorola may see further decline in its ranking. No 5 Sony Ericsson Mobile Communications in London recently reported having shipped 24.4 million units last quarter.

Second-ranked Samsung, based South Korea, moved 45.7 million, and industry leader Nokia, based in Espoo, Finland, shipped 122 million.

"We've seen more share loss and shelf space loss for Motorola," said Michael Walkley, an analyst at Piper Jaffray & Co in Minneapolis with a "sell" rating for the stock. "They're closer to being No 5 than No 2."

Motorola has lost 53 per cent this year. Five analysts recommend selling the stock, eight say buy and 19 advise holding it, according to data compiled by Bloomberg. Seoul-based LG has advanced 1.5 per cent this year on the Korea Exchange.