Motorola’s failure to produce a successor to its bestselling Razr phone has contributed to an 84 per cent drop in its fourth-quarter profits.

The American mobile handset group, which has faced pressure to break up its assets, revealed that it had shipped only 40.9 million handsets — down sharply from 65.7 million a year earlier. It also said that it expected to continue to lose market share this quarter.

The news sent the group’s shares down to end the day at $10.01, a fall of nearly 19 per cent, or $2.31, on the New York Stock Exchange.

Last year Motorola was toppled from its position as the world’s second-biggest handset maker by Samsung. Its global market share has fallen to only 13 per cent, down from 23 per cent at the end of 2006, with a series of new phone models having failed to help it to regain the lost ground.

Carl Icahn, the billionaire corporate investor who has been agitating for change at the struggling group, failed to win a seat on Motorola’s board last year. The debacle claimed the scalp of Ed Zander, the group’s chief executive and chairman, who said in December that he would relinquish both positions.

Greg Brown, Mr Zander’s successor as chief executive, conceded that “there is a lot more work to be done”, but dismissed calls for a break-up of the group. Mr Brown said: “2008 will be a challenging year and the recovery in mobile devices will take longer than previously expected.”

Motorola, which began life as the Galvin Manufacturing Corporation in Chicago, Illinois, in 1928, posted net income of $100 million (£51.3 million), or four cents a share, down from $623 million, or 25 cents a share, a year ago. Sales in its mobile devices division were $4.8 billion, down 38 per cent on the same time last year.

The company forecast a first-quarter loss on continuing operations of five to seven cents a share. Analysts had expected the group to post a profit.

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