UPDATE 2-RESEARCH ALERT-Oppenheimer cuts Motorola to 'perform'

(Adds share price, details)

NEW YORK, Feb 25 (Reuters) - Oppenheimer on Monday cut its rating on Motorola Inc (MOT.N) rating to "perform" from "outperform," on worries of weaker-than-expected demand for its cell phones and limited strategic options, sending its shares down 4 percent.

Oppenheimer analyst Ittai Kidron estimated that Motorola, which is considering separating its loss-making mobile phone unit, may sell about 28 million units in the first quarter. Kidron cited average Wall Street estimates for 32 million.

The analyst also said that demand would not get any better in the second quarter, predicting 29 million phone sales in a research note. While Motorola had warned first-quarter demand would be worse than typical for that time of year, Kidron said it was faring even worse than expected.

Motorola shares slid 46 cents at $10.90 on the New York Stock Exchange. The stock has lost almost 43 percent of its value in the last year as it has lost market share to rivals such as Nokia Oyj (NOK1V.HE) and Samsung Electronics Co Ltd (005930.KS).

Analysts saw Motorola's recent promise to look at strategic options as an invitation for potential suitors to the handset unit and potentially a way to boost the unit's value.

But no obvious buyer has come forward so far, and some rivals, including Samsung and Sony Ericsson, owned by Sony Corp (6758.T)(SNE.N) and Ericsson (ERICb.ST), have openly said they were not interested.

"With limited strategic options, we see a higher likelihood of Motorola retaining its mobile devices business," said Oppenheimer's Kidron.

The company, which has been criticized for having a weak handset line-up, faces pressure from billionaire activist investor Carl Icahn, who has a 5 percent stake in the company and has said it should break up. Icahn also wants to nominate four directors to its board.

Last week, Motorola named Paul Liska, a former private equity executive, as chief financial officer.

While some analysts said that the appointment could increase the likelihood for a deal that could improve valuation, Kidron sees little hope for change from either the new executive or agitation by Carl Icahn.

"We view news of a new CFO as a non-event and we don't believe Carl Icahn can do something that hasn't already been tried," Kidron said. (Reporting by Nachiket Kelkar in Bangalore and Sinead Carew in New York; Editing by Pratish Narayanan/Jeffrey Benkoe)