By Ville Heiskanen

(Bloomberg) — Motorola Inc., which plans to start selling new phones this quarter to return to profit and win back customers from Samsung Electronics Co., predicted a turnaround for its mobile-device unit in the second half.

The company, which today reported a second-quarter loss of $28 million, forecast results at its largest unit will improve this quarter and next. The shares climbed 1.2 percent.

Chief Executive Officer Ed Zander is betting on music and camera phones such as the Razr 2 to compete with Apple Inc.’s iPhone, which debuted June 29, and Samsung phones such as the BlackJack. Zander, who predicted the mobile-phone unit won’t be profitable this year, may have six months to revive the business or risk losing his job, said analysts including Jane Snorek.

“Their new devices are stylistically fine,” said Snorek, a Minneapolis-based analyst at First American Funds, which invests $55 billion and sold its Motorola stock three months ago. “They should be able to grow next quarter.”

First American may consider buying Motorola shares again once the company starts selling e-mail and music phones that consumers find easy to use, Snorek said.

The net loss was 1 cent a share, compared with a profit of $1.38 billion, or 55 cents, a year earlier. Sales fell 19 percent to $8.7 billion. Motorola first announced the loss last week, missing its forecasts for the third time this year.

Excluding costs for items such as job cuts, profit was 2 cents, exceeding the 1-cent average estimate in a Bloomberg survey.

Shares of Schaumburg, Illinois-based Motorola rose 22 cents to $18.22 at 4:02 p.m. in New York Stock Exchange composite trading. They have dropped 11 percent this year.

Forecast

Third-quarter profit probably will be 2 cents a share or “slightly” higher, when some costs are excluded, Motorola said. Analysts had estimated profit would be 5 cents. In the third quarter of last year, Motorola posted net income of $968 million, or 39 cents a share, on sales of $10.6 billion.
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Despite new entries, handheld sales dropped 40% from a year ago
Mobile device sales plunged 40% in the second quarter for Motorola Inc., which yesterday blamed the downturn for an earnings loss of 2 cents per share.

Total sales in the second quarter were $8.7 billion, down from $10.8 billion in the second quarter a year ago. Of that total, mobile device sales were $4.3 billion, down by 40% over the second quarter a year ago, the Schaumburg, Ill.-based company reported.

“This was a challenging quarter for Motorola in which revenue fell short of our expectations due to a decline in mobile device unit shipments,” CEO Ed Zander said in a statement. Chief Financial Officer Tom Meredith said the device maker’s efforts are focused on improving cash flow and profitability. He predicted that head-count reductions and other cost controls in 2008 will save the company $1 billion.

Motorola estimates it has about 13.5% of the global handset market. The company noted that it had continued success with the popular Razr and shipped the 100 millionth unit of the handset during the quarter. However, many analysts have been eager to see Motorola move beyond the Razr and its second-generation model. The company announced the Q9, the Moto Z8 and the Rokr Z6, as well as the Linux/Java GSM Razr2 and EV-DO Razr2.

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After adding music to the RAZR, SLVR, and most recently the RIZR, a source has confirmed that Motorola will soon announce a PEBL style clamshell for music. The ROKR U9 follows in the footsteps of the Z6 by taking on the ROKR model name and appears to add an external color display with music controls similar to the RAZR2 to the curvy model. So far no other details are known about the handset, though one picture clearly shows mini-USB headphones, so it appears to lack a 3.5mm jack, just like the Z6.
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Motorola has announced preliminary estimates of 2Q 2007 financial results. The company expects 2Q sales to be in the range of $8.6 billion to $8.7. Motorola has expected earlier that 2Q sales would be the same as in 1Q 2007 – about $9.4 billion.

Motorola notes that falling earnings are due to lower overall unit volumes of mobile phones in Asia and Europe. The company expects 2Q mobile device shipments to be approximately 35-36 million handsets. As for the results for home solutions and enterprise business, they still meet company’s expectations.

Motorola plans to announce its financial results for 2Q 2007 on July 19.

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Sales package:
Headset
Charger
User Guide

I have never seen a Bluetooth-headset being advertised so widely. Accessories normally sell themselves – announcements of new gadgets pop up in the Internet from time to time, they have a certain consumer group interested in enhancing the handsets they own. But the Motorola S9 is a totally different story. On the product page you can get a virtual tour of the S9, read about the key aspects and look at David Beckham wearing headset on his metrosexual head. However does it live up to the hype? First of all, let’s talk about the S9 and then turn to the conclusions.

Design and controls

I would characterize the design as aggressive: black and red colors, rubberized keys, no gaps or holes whatsoever –together all these things look more like a sports tool. In fact, that’s the way it is, since the S9 is positioned as a device for people preferring active way of life. And who are these people? Obviously, teenagers. Young people I questioned about the headset came to the following conclusion: yeah, it is a cool gadget for wide pants, sport shoes and proper music playing at full blast. Yuppie in ties should look elsewhere. So I have nothing left to do but agree that the S9 is a typical youth-aimed product styled in the way we have come to expect, that’s it. Also I can recommend the headset to gym-fans, as there are no irritating wires, which you could hook with dumbbells or chest expander.

The build quality is not bad, the materials used are quite decent, and it is good to see that it is a pretty much no-nonsense design without any bulges, ridges, whatever. The metal you see here surely adds some sort of style to it as well. It can be found in the company logo placed on rear and in the speakers grill. The fact that the device can not be folded up is really disappointing, since it takes to much space in your pocket, so the best way to carry the S9 is a bag or a jacket.

Wearing the headset
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