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Motorola has said launch of new handsets and cost cutting should see its handsets business returning to profitability.

Till recently Motorola was the world’s second largest mobile phones brand behind Nokia but ahead of Samsung and SonyEricsson, however due to lack of new and innovative models Motorola was relegated to the third place with Samsung taking over the second place.

"We’ll be profitable in all businesses by 2008," Chief Operating Officer Greg Brown said.

Wall Street has criticised Motorola for a weak phone line- up as it failed to deliver a strong follow-up to its flagship Razr phone, especially in the wake of hot products from competitors such as iPhone maker Apple Inc.

For long Motorola has been considered a one-model wonder—the wonder coming in from Razr, its blockbuster model in 2004. Though the product was extremely successful for Motorola, the company could not carry on with the success of the Razr.

Now Motorola has launched Razr 2, hoping to recreate the success that the first version of the phone did.