Motorola Mobility's partnership with Verizon won't end even if the operator does introduce the iPhone, with the vendor tipped to develop a tablet device incorporating Verizon’s FiOS IPTV and broadband services, Rethink Wireless said.
Motorola shares fall on 1Q loss forecast
Motorola's shares dipped on Thursday and analysts cut their targets on word the company expects its soon-to-be spun off mobile division to report a loss in the first quarter of 2011.
Co-CEO Sanjay Jha on Wednesday told investors that Motorola Mobility will likely run at a loss in the first quarter as a result of competitive challenges.
Motorola's shares on the NYSE fell 0.44% to $7.97 (€6.02) during Thursday's trading, as analysts reacted by lowering their 1Q targets for the group.
Gleacher & Co cut its earnings per share forecast from 8 cents to 7 cents, but maintained a buy rating, Barron's said, while RBC analyst Mark Sue lowered his target to 9 cents from 11 cents, and his full year estimate to 48 cents from 53 cents, according to Reuters.
Jha, who will head up the new company when it is spun off in January, also hinted that the division will be in for a tough time if US carrier partner Verizon Wireless - a key source of phone sales - finally starts to sell the iPhone, All Things Digital said.
The company is trying to diversify sales into non-domestic markets and to widen its carrier base.
Verizon Wireless hasn't officially announced it will carry the iPhone, but is widely rumored to be planning a launch early next year. Multiple reports have claimed that Apple has been developing a CDMA iPhone which would be compatible with the carrier's 3G network.
There is also speculation that Apple may be developing a 4G iPhone suitable for Verizon Wireless' new LTE network, although Verizon has previously indicated it could take up to six months for the first compatible phones to hit shelves.