Analyst Conference Summary

conference date: October 25, 2007 @ 4:30 AM Pacific Time
for quarter ending: September 30, 2007 (3rd quarter)

Forward-looking statements

Overview: Revenues increased slightly sequentially and were well down from year-earlier. Another bad quarter, but not getting worse.

Basic data:

Revenues were $8.8 billion, up 1% sequentially from $8.7 billion and down 17% from $10.6 billion in Q3 2006.

Net income from continuing operations was $60 million, a small fraction of the $968 million earned year-earlier.

EPS (earning per share) of $0.02 from continuing operations, flat sequentially but down from $0.29 year-earlier.

Guidance:

Q4 2007 non-GAAP earnings from continuing operations of $0.12 to $0.14 per share.

Conference Highlights:

Continued strength in enterprise mobility solutions offset by continued weakness, but a sequential improvement, in Mobile devices. Cash flow progress. Investing in broadband video and other advanced technologies.

Non-GAAP earnings were $0.06 per share.

Gross margins improved sequentially 80 basis points (0.80) and operating costs declined sequentially.

Positive operating cash flow of $342 million. Ended with $4.2 billion, down slightly due to acquisitions, share repurchases, and dividend payments. Improved cash conversion cycle.

Mobile devices segment revenues were $4.5 billion, down 36% from year earlier but up 5% from $4.3 billion sequentially. 37.2 million handsets were shipped. Slight sequential increase in prices; captured about 13% of market. EMEA and Asia-Pacific remain challenging to us. Channel inventories have improved. Introduced new WiMax chip set. Lots of new product models introduced in Q3 or to be in Q4.

Home and Networks Mobility segment sales were $2.4 billion, up 6% from year-earlier but down sequentially Good IP set top device shipments. Plans to divest embedded communications computing business for $350 million.

Enterprise Mobility Solutions segment revenues were $2.0 million, up 47% from year-earlier but were flat sequentially.

Cost of sales was $6.3 billion. Gross margin 2.5 billion. SG&A of $1.2 billion, R&D $1.1 billion, other charges $115 million, operating loss of $10 million. Other income was $18 million. There was an income tax benefit of $32 million.

Share repurchases: $115 million for 7 million shares.

Inventory was flat sequentially.

Total operating expenses expected to be $500 million lower in 2008 than in 2007.

Q&A:

SG&A going into Q4? Not providing guidance on that, but keep tight control on costs.

Losing share in a bunch of regions around the world, direction of share? We think we gained share in mobile devices. At beginning of the year focused on profitability. Still number 1 in Americas. Now that we are getting to profitability, market share should follow. Did lose share in India and some smaller markets.

Any inventory issues? In aggregate is back to normal, have some areas we can still improve on.

New mobile platform coming? We are pleased with Razr2 sales. W low-end series refreshed too. A richer experience phone is being developed.

Collaboration with carriers on development speed? Our strategy is not dependent on a one-hit wonder. Worked with Verizon on Q-9 music device. Talked to big carriers in Europe last week.

General outlook drivers? Revenue up with some bottom line improvement in all major segments. Difficult Q4 comparisons.

Symbol acquisition has exceeded our expectations.

How can you reach break even in Mobile Devices? ASP was $121 for Q3. Focused on profitability and margin. ASPs reflect mix. Gross margin has improved 3 quarters in a row.

Did have a favorable tax rate in Q3, but also had a compensating drop in interest income.

3G products? Introducing new products, especially CDMA side. Q9 is a 3G product that is shipping in Europe, as is Z8. 3G is a priority for us, including a low-cost 3G phones.

Demand in Q4? Double digit growth in industry.

Supply issues? Don't expect any in Q4.

Share repurchases? Have about $4.5 billion left in program. As cash flow situation improves we gain flexibility on buy backs.

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