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Tuesday, October 03, 2006

Motorola Won't Go Away (MOT)(INTC)(NOK)

Motorola's stock had an extraordinary showing in the quarter ending September 29. The stock rose 25% to $25. Much to the dismay of Nokia, Samsung, and Sony Ericsson, the US cellphone company and it RAZR won't go away. Along with strong year-over-year growth the last two calendar years, the company's last quarter was extremely strong with revenue of $10.5 billion and operating income of $1.5 billion.

Sony Ericsson recently opened a factory in China in the hopes of picking up share from Motorla and others, but "it's the product, stupid". In 2003, Nokia had 40% of the global share in handsets, but Motorola's thin phones are becoming a hit in emerging markets as well as places like the US. And, MOT is hardly standing still. It is moving deeper into the video delivery market. It is also improving its share of the enterprise wireless business which is spearheaded by its purchase of Symbol Technologies.

Perhaps as important as all of these other initiatives is the company's move into WiMax with partners Samsung and Intel. Sprint has already adopted the tech for its next generation broadband-enabled phones, and the technology is in trial in dozens of countries around the globe.

Wall St. is bidding up Motorola because it is one of the few big tech companies that is hitting on all cylinders. If the company does not have any significant missteps, the rise in share price may continue.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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