Motorola Bets On Android As Mobile Slide Continues

Lagging behind T-Mobile's G1 handset, Motorola vows it will have an Android phone in stores in time for the fourth-quarter holiday season.
Motorola's woes continued as the company Thursday announced deepening losses and a sharp drop in handset deliveries in its first quarter.

However, co-CEO Sanjay Jha, who leads Motorola's mobile devices unit, said the company plans to have "differentiated Android-based devices in stores in time for the fourth-quarter holiday season." Handset sales in the first quarter plunged to 14.7 million units, down 23% from the previous quarter.

The company said its overall loss reached $231 million in the quarter -- more than the $194 million it lost in the previous year's first quarter. Sales were down to $5.4 billion, from $7.5 billion.

Sales in Motorola's other divisions also were down in the difficult global economic environment, with the declines reaching 11% in the enterprise mobility division and 16% in home and network mobility. Its two broadband mobility solutions units, however, were profitable.

"Our Broadband Mobility Solutions businesses performed well by delivering value for our customers and adding to an already impressive portfolio of products," said Greg Brown, CEO of the division, in a statement. "We are executing with operational and financial discipline while we make targeted investments for our future."

Motorola has been fighting with Herculean effort in its mobile devices operation and brought in Jha from Qualcomm several months ago to attempt to turn around the unit. Motorola had shopped the unit around to other handset manufacturers, which all turned their noses up at the acquisition prospect -- a humiliating development for the company that had virtually invented the mobile phone.

Even the company's commitment to Google's Android is late, as carriers already have been offering Android handsets for months led in the United States by T-Mobile's G1 handset. Motorola clearly is gearing up for big Android announcements in the coming months. Motorola also is working with Microsoft on its Microsoft Windows Mobile offerings, expected to be announced in the fall.

"In the quarter at Mobile Devices, we implemented aggressive actions to reduce costs and also gained solid traction on improving operations effectiveness," Jha said. "Customer feedback on our smartphone road map remains very positive." He said the handset operation has increased its 2009 cost-reduction goal to more than $1.3 billion.

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