Motorola Delivers Profit, But What About Handsets? - InformationWeek

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Commentary
7/30/2009
02:08 PM
Eric Ogren
Eric Ogren
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Motorola Delivers Profit, But What About Handsets?

Motorola announced its second quarter earnings and surprised more than a few by turning up a profit. This is certainly a positive sign, but Motorola has yet to deliver a winning handset this year. Or last year, for that matter.

Motorola announced its second quarter earnings and surprised more than a few by turning up a profit. This is certainly a positive sign, but Motorola has yet to deliver a winning handset this year. Or last year, for that matter.My view of Motorola since it announced massive layoffs back in January was that it is taking things easy, regrouping, and planning for the future. Nothing says this more clearly than the results it posted for the second quarter of 2009.

Here are the highlights from the Mobile Device segment of Motorola's business.

Mobile sales were down $1.8 billion, a drop of 45% compared to the year-ago quarter. The total loss was $253 million. The mobile division reduced its operating loss by 50% sequentially from $509 million in the first quarter of 2009.

  • Shipped 14.8 million handsets; estimated global handset market share of 5.5 percent
  • Continued progress on differentiated smartphone devices targeted to launch in the fourth quarter of 2009
  • Launched the CDMA Rival A455, a side-slider with one-touch messaging access and QWERTY keyboard; and the 3G Karma QA1, a slide-out QWERTY with one-click access to Facebook and MySpace
  • Launched the iDEN Clutch i465, Motorola's first device that combines the power of push-to-talk and the convenience of a QWERTY keyboard
OK, so somehow Motorola has been able to get things somewhat under control in its phone unit. That's really positive news. The problem is, the phones listed above are of the meat-and-potato variety. In other words, they are the simpler, everyday handsets that most people buy when they're looking for something average. Motorola has done nothing but produce average phones for the past 18 to 24 months.

While meat-and-potatoes phones will still help pay the bills at the end of the day, Motorola is losing out big time when it comes to the upscale, more-profit-friendly smartphones. Motorola has not introduced a single break-through phone that has wowed, well, anyone, for as long as I can remember.

This is where Android comes into play. We know that Motorola is serious about Android. It recently offered the MOTODEV tools for developers interested in helping Motorola's Android efforts. It has posted job listings for Android experts. And the blogosphere has been coughing up Motorola-branded Android handsets constantly. (The latest appeared just today.)

Even though I know how long it takes to develop and produce mobile phones (18-24 months), Motorola needs to hurry things along. I am hoping, for Moto's sake, that the "dozens" of Android models that Google's Andy Rubin claims are slated for release in 2009 includes at least one -- if not more -- Android handsets.

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