Motorola

(MOT)

said it is still veering toward its first quarterly operating loss in 15 years amid a sales slowdown.

The dramatic sales slowdown in mobile phones has hurt Motorola, which told

Reuters

this morning that it expects its personal communications unit, made up mainly of cell phones, to report a loss in the first quarter. Motorola said the unit should be profitable in the second half of the year, as new models, including high-speed mobile Internet phones, come to market.

Motorola, like

Ericsson

(ERICY)

has been hit by slowing demand for handsets, a downturn in the U.S. economy and increased price pressure on its products -- especially from industry leader

Nokia

(NOK) - Get Report

. Nokia said earlier this month that it would meet first-quarter earnings targets, but the company has lowered its forecast for industrywide handset sales in 2001.

Motorola

laid off 7,000 employees in its cell phone unit earlier this month. Analysts expect the company to lose 7 cents a share in the first quarter.

The company also reportedly said this morning that it won a deal for 500,000 high-speed general packet radio services phones from a large European operator, but didn't specify whether this was linked to its GPRS deal with

France Telecom's

(FTE)

mobile phone unit

Orange

.