Motorola warning fuels mobile fears

Motorola admits to a reduction in orders, fuelling talk of a mobile slowdown

Mobile manufacturer Motorola announced Friday that it had been hit by an economic slowdown in the US which could push it into loss for the first quarter of this year.

The company admitted that it was not going to achieve its sales and earnings targets for the first quarter of 2001. It blamed trading conditions in America, where an economic slowdown has hit orders for its equipment, and warned that unless the situation improves it would record an operating loss for the first three months of 2001.

In a statement, it explained that it planned to respond to its weakened sales by taking "additional cost reduction steps".

Motorola is one of the Big Three mobile handset manufacturers, with around 10 percent of the market share. In January it warned that it was experiencing big drops in orders for its semiconductor and handset units, having already cut its earnings prediction for Q4 2000 by 40 percent. Last month it cut 2,500 jobs at a handset manufacturing plant in the US.

Fellow handset maker Nokia recently cut its prediction for worldwide sales of mobile phones, prompting fears that the mobile sector was facing difficult times.

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