Motorola cuts R&D spending, aims to return to profitability

Motorola is aiming to cut its quarterly R&D expenses for mobile devices by about 15% by the end of 2007 to try to return to profitability, a Reuters report said.

The Reuters report quoted Stu Reed, the new head of the company's handset business, as saying that Motorola would be careful not to hurt development of new cell phones even as it looks for cost savings.

Reed said there would be a wave of new products, including an announcement in the next 30 days, but did not provide details, the Reuters report said.

Analysts and investors have criticized Motorola for a weak phone line-up as it had failed to deliver a strong follow-up to the Razr, especially at a time when hot products from competitors like iPhone maker Apple have hit the market, the reporta added.

'It's not going to be about lower research and development,' Reed was quoted as saying. 'It can't be. It's got to be more efficient research and development spending.'

He said most of the expense reduction had been achieved and would come from prioritization in Motorola's mobile devices portfolio and spending less on older software platforms as the company focused more on open systems, such as Linux and Java, the Reuters report said.

Motorola, which has dropped to third place in the global handset market behind Samsung and market leader Nokia, has reported two quarterly losses in a row and a year of disappointing quarters, the report further said.

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