Motorola Inc. (NYSE: MOT) last Thursday charmed investors when it revealed its Cliq smartphone, which will compete head on with Apple Inc.’s (Nasdaq: AAPL) iPhone and Research in Motion Ltd.’s Blackberry.

Motorola’s stock is up nearly 12% since the announcement, as investors are hoping the new phone will be enough to win back some of the company’s lost market share.

However, saving Motorola’s mobile division – which the company plans to spin off – is a daunting task. The company – which invented the cell phone, as well as a plethora of other communication devices used by police and military – has seen its global market share of wireless phones fall to 2% in its second quarter this year from 31% in 1995. Mobile phone sales accounted for 33% of Motorola’s second-quarter revenue, down from 41% a year ago.

Motorola

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Maintain Positive Outlook (Changed from Neutral March 2009)

Based on extreme industry weakness in late 2008 and early 2009, we believe valuation levels now reflect remedial conditions in the economy. Depressed stock prices foster more favorable entry points at this juncture as government stimulus plans and restricted operating expenses may drive opportunities for improved earnings.

Telecom companies are starting to report minimal financial improvements in terms of revenue and earnings levels. In addition, economic stimulus plans throughout the world, including the U.S. broadband infrastructure development program -- and similar structural subsidies in China and India -- may be a boon for selected service providers and equipment manufacturers.

Telecom carriers and equipment providers that offer the most attractive opportunities are focused on third-generation (3G) wireless, broadband (DSL) and fiber-to-the-home/node networking. There are also a few market leaders that have proven able to survive the sometimes turbulent opportunity swings in the industry.

It is our belief

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Maintain Positive Outlook (Changed from Neutral March 2009)

Based on extreme industry weakness in late 2008 and early 2009, we believe valuation levels now reflect remedial conditions in the economy. Depressed stock prices foster more favorable entry points at this juncture as government stimulus plans and restricted operating expenses may drive opportunities for improved earnings.

Telecom companies are starting to report minimal financial improvements in terms of revenue and earnings levels. In addition, economic stimulus plans throughout the world, including the U.S. broadband infrastructure development program -- and similar structural subsidies in China and India -- may be a boon for selected service providers and equipment manufacturers.

Telecom carriers and equipment providers that offer the most attractive opportunities are focused on third-generation (3G) wireless, broadband (DSL) and fiber-to-the-home/node networking. There are also a few market leaders that have proven able to survive the sometimes turbulent opportunity swings in the industry.

It is our belief

...

Maintain Positive Outlook (Changed from Neutral - March 2009) Based on extreme industry weakness in late 2008 and early 2009, we believe valuation levels now reflect remedial conditions in the economy. Depressed stock prices foster more favorable entry points at this juncture as government stimulus plans and restricted operating expenses may drive opportunities for improved earnings. Telecom companies are starting to report minimal financial improvements in terms of revenue and earnings levels. In addition, economic stimulus plans throughout the world, including the U.S. broadband infrastructure development program -- and similar structural subsidies in China and India -- may be a boon for selected service providers and equipment manufacturers. Telecom carriers and equipment providers that offer the most attractive opportunities are focused on third-generation (3G) wireless, broadband (DSL) and fiber-to-the-home/node networking. There are also a few market leaders that have proven able to survive the sometimes turbulent ...

This is part 2 of my Key Telecom Trends article.  Part 1 can be read by clicking here. Two other trends in Telecommunications over the past few years that should have a significant impact in the future are:

Voice Over Internet Protocol (VOIP)

Voice Over Internet Protocol (VOIP) emerged on the commercial scene in 2004 harnessing the power of broadband internet connections to deliver unlimited voice plans, both local and long distance, over an internet connection.  VOIP has enabled co-workers within a firm or from different companies to communicate through video conferencing.  Cisco’s (CSCO) Telepresence has been a successful enterprise VOIP system for businesses to communicate in a real-lifelike conference room.  It has also seen substantial growth over the past year as companies seek to cut travel expenses in a recession, replacing it with videoconferencing like Telepresence.  From a consumer perspective, VOIP has became increasingly attractive in

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Telecom Industry - Maintain Positive Outlook (Upgraded From Neutral in March 2009)

Based on extreme industry weakness in late 2008 and early 2009, we believe valuation levels now reflect remedial conditions in the economy. Depressed stock prices foster improved investment entry points more favorable at this juncture should stimulus plans, restricted operating expenses and higher earnings level result along with sustainable purchasing activity.

Telecom companies are starting to report minimal financial improvements in terms of revenue and earnings levels. In addition, economic stimulus plans throughout the world, including the U.S. broadband infrastructure development program -- and similar structural subsidies in China and India -- may be a boon for selected service providers and equipment manufacturers.

Telecom carriers and equipment providers that offer the most attractive opportunities are focused on third-generation (3G) wireless, broadband (DSL) and fiber-to-the-home/node networking. There are also a few market leaders that have proven able to survive the sometimes turbulent

...

Telecom Industry - Maintain Positive Outlook (Upgraded From Neutral in March 2009)

Based on extreme industry weakness in late 2008 and early 2009, we believe valuation levels now reflect remedial conditions in the economy. Depressed stock prices foster improved investment entry points more favorable at this juncture should stimulus plans, restricted operating expenses and higher earnings level result along with sustainable purchasing activity.

Telecom companies are starting to report minimal financial improvements in terms of revenue and earnings levels. In addition, economic stimulus plans throughout the world, including the U.S. broadband infrastructure development program -- and similar structural subsidies in China and India -- may be a boon for selected service providers and equipment manufacturers.

Telecom carriers and equipment providers that offer the most attractive opportunities are focused on third-generation (3G) wireless, broadband (DSL) and fiber-to-the-home/node networking. There are also a few market leaders that have proven able to survive the sometimes turbulent

...

Telecom Industry - Maintain Positive Outlook (Upgraded From Neutral in March 2009)

Based on extreme industry weakness in late 2008 and early 2009, we believe valuation levels now reflect remedial conditions in the economy. Depressed stock prices foster improved investment entry points more favorable at this juncture should stimulus plans, restricted operating expenses and higher earnings level result along with sustainable purchasing activity.

Telecom companies are starting to report minimal financial improvements in terms of revenue and earnings levels. In addition, economic stimulus plans throughout the world, including the U.S. broadband infrastructure development program -- and similar structural subsidies in China and India -- may be a boon for selected service providers and equipment manufacturers.

Telecom carriers and equipment providers that offer the most attractive opportunities are focused on third-generation (3G) wireless, broadband (DSL) and fiber-to-the-home/node networking. There are also a few market leaders that have proven able to survive the sometimes

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Verizon is my long term favorite, beyond 2010 for two main reasons.  First off, Verizon has been aggressively investing in and advertising for their fiber optic network called FiOS. FiOS is a fiber-to-the-premises (FTTP) network that replaces the traditional coaxial cables used for TV, broadband internet and phone with lightning fast fiber optics. FTTP is a complete fiber optic network from the service provider to the premise of the customer. This differs from AT&T’s fiber-to-the-node (FTTN) network called U-Verse in which fiber optic cables are used until they reach a cabinet outside a community. From this cabinet, all houses in a local neighborhood connect using the traditional copper coaxial cables, thus limiting its speed in order to cut corners to save on the high costs of fiber optics. Fiber optics are the future of the internet as bandwidth continues to grow exponentially with people watching more videos and TV

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Dismal economic events have culminated in drastic declines of market valuation among companies in nearly every industry/sector, including impacts to telecom industry performance. Capital spending constraints among carriers, and limited funds available to sustain (grow) telecom services over the next six- to twelve-months, may be outcomes of credit markets remaining restricted and overall GDP growth remaining tepid or even retracting. Telecom carriers often resort to credit markets for funding capital projects, while telecom equipment companies conventionally use equity share offerings in lieu of debt instruments. The outcome has been a disappointment, regardless of the selected financing mechanism.

As a result of weakening macroeconomic indicators, telecom carriers' capital expenditures remain limited in 2008 and early 2009. There has been more selectivity on technology choices and leveraging cost-savings synergies, such as streamlining purchasing arrangements and reducing the number of preferred vendors. Shareholders continue to foster an environment where executives are

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