Motorola may bow out of cellphones, aid Apple and rivals

Richard Windsor of the London-based firm explains that an investigation suggests Motorola would drop the segment entirely and instead focus on its enterprise and government sectors.

Talks of a Chinese takeover, however, are an "old chestnut" that isn't likely to come true unless a buying firm knows how to mend Motorola's business, the analyst says. Instead, the American company is most likely to become profitable only after enduring a "very difficult" 2008.

Motorola is already said to be suffering, and in the fourth calendar quarter of 2007 reported a 38 percent drop in its mobile device sales compared to the same period a year ago -- a stark contrast to an industry widely agreed to be growing over time. The