Motorola cost cutting may have paid off - despite falling mobile sales, profits rose

Motorola has surprised a lot of people by showing a profit during the second quarter of this year. Analysts have claimed that credit for this is mostly due to Motorolas heavy handed cost cutting strategies this year, including axing over 8,000 employees.

What’s the overall image?

It’s still not looking good for Motorola, as the slight profit recorded in Q2 is mostly due to cost cuts and re-arranging. Sales are still going down, pretty much across the board. Motorola showed net profits of $26 million from a total revenue of $5.5 billion. That total revenue is down from $8.1 billion during the same period in 2008. So while the cost cutting has bought them some time, Motorola is still looking shaky.

What are they doing about that?

Releasing new devices, it seems. Motorola, which hasn’t had a hit since the RAZR, is planning on releasing several smartphones in time for the Christmas - and it’s aiming at Windows Mobile and Android.

However, Motorola has also been showing huge interesting in the growth of 4G and WiMax. As we’ve discussed before, Motorola has been taking great initiative in becoming a global services provider for the coming global growth of high-speed 4G mobile networks.  At times I thought it might move into being a tech provider full-time, but the plans for more smartphones would indicate that Motorola hopes to pull back from the brink by providing good mobile internet-capable devices to run on those networks.