MOTOROLA’S SEMICONDUCTOR BUSINESS IN BIG TROUBLE, says Steven Den Beste:
Motorola’s processor business, in particular, is a major disaster. They have two primary sets of customers: embedded and Apple. In the embedded business they’re being eaten alive by ARM, and Apple is not a big enough customer to support the PPC architecture on its own. One way or another Motorola is going to have to substantially change their semiconductor business, and that’s probably going to involve actual shutdowns of entire business sectors.
These losses happened after Motorola’s fabled mass layoff. In the last two years, they’ve laid off one third of the total staff of the company, and by doing so seem to have made most of their businesses viable. But even though it sustained a disproportionate percentage of the layoffs, the semiconductor business is still the corporate problem and is still bleeding cash like a firehose. They can’t go on like this, and with the new accounting rules they can no longer disguise where in the company the money is going. Motorola’s stockholders are going to start asking very pointed questions, like “Why are we in this business at all? Wouldn’t we save more money in the long run by biting the bullet and shutting the f***er down?”
Read the whole piece–other than the occasional R-rated word, this is terrific business reporting and analysis, as good as in any traditional media.