Sotto voce

New York, Jan. 5 (Reuters): Motorola Inc, the world’s No. 2 cell phone manufacturer, lowered its forecast for quarterly results on Thursday due to a shortfall at its mobile devices unit.

The earnings warning made late on Thursday fell far below Wall Street expectations and could be the result of a fiercer price contest between Motorola and its larger rival, Nokia, as well as a greater reliance on emerging markets where cheaper handsets are sold, analysts said.

“This probably means they’ve been trying to fight Nokia on pricing. It probably means Nokia’s going to see a similar trend — high unit volumes and low phone pricing and margins,” said Charter Equity Research analyst Ed Snyder.

Motorola said it now estimates fourth-quarter sales of $11.6 billion to $11.8 billion, shy of its prior view of $11.8 billion to $12.1 billion, despite investor hopes for more robust sales from its slim Razr phone and new models like the Krzr.

“They probably cut pricing on the Razr and the other phones didn’t make up the difference,” said Snyder.

Motorola also said it expects to report net income of 13 cents to 16 cents per share, below an internal forecast compiled at the start of the quarter.

The forecast includes 10 cents per share in special charges, such as investment-related losses, stock-based compensation costs and extraordinary tax expenses.

Analysts on average had forecast fourth-quarter revenue of $11.99 billion and earnings per share of 38 cents, before special items, according to Reuters Estimates.

The reduced forecast may also stem from demand in emerging markets such as China and India but less strength in western Europe and the United States, Snyder said. He expected Motorola and Nokia shares would trade lower on Friday.