Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from Ittai Kidron from Oppenheimer. Please go ahead.
Ittai Kidron - Oppenheimer
Thank you very much. Actually the question is for you, Sanjay. Thanks for the color on the plan. Can you get a little bit more specific, though it sounds like you are significantly retrenching the business on a geographic basis? Does that mean that next year, regardless of a macro conditions, you still expect a huge shrinkage in your volume, as well as you get out of Europe, which we haven't mentioned, and some regions in Asia, which are, on a combined basis, around a quarter of your business?
Sanjay Jha
Ittai, we are not getting out of any region, in particular. What we are doing is focusing our resources where we think we have the best product portfolio and we have the best brand recognition for Motorola. We will continue to participate in Europe and in other markets that I hadn't mentioned specifically. But our focus will be North America, Latin America and parts of Asia.
In terms of volume reduction, I won't provide you any guidance. But certainly, as we look at which areas we address, there will be changes in our volume. We won't address every single geography equally going forward.
Ittai Kidron - Oppenheimer
With regards to your gross margins as you make that geographic focus in your business longer term is because of that your gross margin potential is lower than otherwise? The US is known to be a lower gross margin region. Does that cap your capability to improve gross margins going forward?
Sanjay Jha
As you know, with the plans that we have, we're making changes in the business. In the short-term, we think that in the first half next year, our ability to address the smartphone segment is more limited. As you know, some carriers in the United States are saying that as much as 30% of their shipment is going to be in smartphone.
So I do believe that in the short-term there are some implications in terms of the gross margin pools we address. But our changes here are significant changes and position us to deliver compelling products, addressing the large margin pools in wireless in the medium to long-term. So I am confident that we will do that medium to long-term, but in the short-term we have made a decision to retrench our product portfolio.
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