Motorola announced plans to reduce its investments in WiMAX and Long-Term Evolution (LTE) technology as it looks to cut costs. The company posted a net loss of $228 million for the first quarter, compared with $190 million the previous year.
"We are moderating our investment in WiMax R&D to reflect current market conditions," co-CEO Greg Brown said during the company's conference call. "That said, we've had great success with over two dozen actual contracts. We will recognize, as expected, approximately $500 to $600 million in fiscal '09, so we are well-positioned. I don't think of WiMax and LTE separately, per se, because the way we invested in R&D and developed our architecture, there is a high level of reusability between the two investments."
Motorola has been the market leader in WiMAX, racking up contracts worldwide and winning business with Clearwire early on. Motorola is the vendor behind Clearwire's launch in Portland and has built out the Atlanta, Charlotte, Chicago, Honolulu, Las Vegas and Seattle markets targeted for launch this year, according to Telephony.
The vendor has also been heavily promoting LTE, conducting trials in Europe with Vodafone and other operators. While few LTE contracts have been awarded, Motorola did not score a win with Verizon, which chose rivals Alcatel-Lucent and Ericsson.
"With LTE, Verizon selected two other providers for LTE plans," Brown said. "It's possible they'll select a third in 2010. We'll see. But having said all that, the investment levels we're making are a pragmatic reflection of where we are. We still have a couple customer opportunities. I think there will be another customer decision in Asia on LTE between now and the end of the year, of which we are competing for that business. We will always be diligent on the amount of spend and making sure we can make capital for the longer term. We're not just in a segment to be in it."
For more:
- see Telephony
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