Motorola made a loss of $0.55bn (£0.28bn) in financial 2007 despite overall earnings $36.6bn (£18.7bn), compared with profit of $4.1bn (£2.1bn) in 2006.

Fourth quarter profit also plunged, by 84 per cent to $100m ($51.1m), with total sales declining almost 19 per cent to $9.6bn (£4.9bn).

Despite the launch of nine new phones and shipments of nearly 41 million handsets during the quarter, revenue from mobile sales dropped 38 per cent to $4.8bn (£2.4bn) compared with the last quarter of 2006.

Operating loss for the Mobile Devices business area was $388m (£198m), compared with profit of $341m (£174m) in the same quarter in 2006. Full-year revenue for the division was $19bn (£9.7bn), 33 percent down on 2006 and the segment posted an annual loss of $1.2bn (£0.61bn) compared with earnings of $2.7bn (£1.4bn) in 2006.

On the brighter side, quarterly revenue from Motorola's enterprise mobility segment were up 35 per cent year-on-year to $2.1bn (£1.1bn), largely driven by sales derived from the acquisition of industrial handheld device specialist Symbol in early 2007.

Quarterly earnings for the division increased year-on-year to $451m (£230.1m) from $323m (£165m). Annual revenue was $7.7bn (£3.9bn), 43 per cent up on 2006. And profit was up to $1.2bn (£0.6bn) from $958m (£489m).

Motorola chief executive Greg Brown, who took over the company on 1 January this year, blamed the poor results on heavy competition, gaps in Motorola's handset portfolio, delays in new product development, and weakening demand for existing products like the RAZR2.

The firm's handset sales were certainly considerably below its normal seasonal pattern, according to Martin Garner, mobile director at analyst Ovum.

"In the third quarter of the year, Motorola launched a slew of new low-end models and these started shipping in the fourth quarter - which changed the mix and took the average sales price (ASP) down," said Garner.

"But new products require a marketing push so costs rose and volume gains were not enough to lift profitability," he said.