Motorola has made quite the comeback in the last
couple of years after slipping significantly with handsets and smartphones that
consumers just didn't buy. The comeback made by Motorola is thanks in large
part to the Android operating system.
The latest launches from Motorola including the Xoom
Android tablet and Atrix Android smartphone have turned out to not be
as popular as Motorola hoped according to some reports. The revelation that the
two products just aren’t
doing well on the market comes from analyst James Faucette from
Pacific Crest. Faucette cites a channel check he performed that shows the
sell-through for both the Atrix and the Xoom "have been
Faucette reports that the Atrix in
particular is being hurt by the low $49 price tag Apple has on the iPhone 3GS
and the same $49 price for the HTC Inspire. Those low prices are conspiring to
limit the demand for the Atrix. Because of the poor demand and sales of the
Motorola devices, Faucette is cutting the 2011 revenue forecast for Motorola to
$12.2 billion from its previous estimate of $13.7 billion.
Faucette also dropped his outlook for Motorola in
2012 as well cutting the projection to $13.6 billion from $15.3 billion before.
He also notes that further reductions could be made to his projections if
Motorola is unable to adjust and refresh its product portfolio. Undoubtedly,
the lower price of the iPad 2 is hurting sales of the Xoom tablet as many tablet
shoppers aren't willing to give Android a shot.
Faucette does note that Wall Street is confident
in Motorola management and that the company has good cash reserves. However, he
notes that if Motorola isn’t able to launch products that stand out in a crowded
market shareholders may start calling for new management.