Motorola credited junk status
By siliconindia   |   Monday, 08 December 2008, 23:32 IST
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San Francisco: Motorola's credit ratings have been lowered to junk status by Standard and Poor, a financial services company, as a result of its decline in the handsets business. The rating was cut two levels to BB+, a score below investment grade. Moody's Investors Service, another financial service company had announced that it may degrade Motorola's debt, currently rated Baa2, or two levels above non-investment grade. Sanjay Jha, Co-Chief Executive Officer is currently trying to turn around the phone business using Google Inc's Android software to build more advanced phones. He's going up against Apple and Samsung Electronics, while also facing the global economic slump. Motorola had announced in October that it won't meet a goal of splitting off the mobile-phone unit by the third quarter of 2009. "Motorola's handset business has lost about $2.8 billion in operating income since the start of 2007. The company's other units, which include networking gear, partly offset these difficulties," said Bruce Hyman, S&P. Motorola lost its top ranking in the U.S. mobile phone market to Samsung last quarter. Motorola had a 21.1 per cent share, while Suwon, South Korea-based Samsung had 22.4 percent, giving it the top spot for the first time, according to Newton, Massachusetts-based research firm Strategy Analytics. Motorola shares rose 4 cents to $4.36 in New York Stock Exchange composite trading. They have dropped 73 percent this year.

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