SCHAUMBERG, Ill.—The SARS situation in China may cost Motorola Inc. up to $500 million, according to a new research note from investment banking firm RCB Capital Capital Markets.
The firm said it is reducing its yearly handset sales estimates for Motorola from $11.7 billion to $11.2 billion due to the outbreak of SARS in China. Motorola controls about 25 percent of the Chinese handset market, and considers China one of its most important opportunities.
“We believe Motorola recently scaled back its production of low-end phones for the China market due to SARS, exacerbating excess handset inventory levels,” the firm said in a note.
Motorola was not immediately available for comment.
The SARS situation has stymied much in the technology sector; indeed, the 3G World Congress show in Hong Kong was recently postponed until November and moved to Bangkok, Thailand (see 3G World Congress set for Nov. in Thailand).
