Motorola Bleeds More Cash as it Waits for Google to Save It
May 2, 2012 2:02 PM
comment(s) - last by
Competition has not been kind; Motorola struggles to keep pace with Apple and Samsung
Yesterday, when the Interactive Data Corp. (
) posted its
estimates of smartphone sales
one company was noticeably absent from the top five of either smartphone or total phone (incl. feature phone) sales -- Motorola Mobility, Inc. (
I. Motorola Bleeds Cash Despite Having Perhaps the Best Android Out There
on the verge of being acquired
by Google, Inc. (
), following U.S. [
] and European Union [
] approval of the
. However, it has seen the purchase stalled by China [
], which is using the pending approval as leverage in an effort to
silence Google's claims of abuse
in the Asian giant.
Things are looking pretty bad at Motorola, who on Wednesday reported a fifth straight quarter of losses. The firm pulled in a net revenue of $3.1B USD for Q1 2012, while posting an $86M USD net loss, just slightly worse than the $81M USD and $80M USD losses Motorola posted in Q1 2011 and Q4 2011, respectively.
Despite enjoying a posh position as one of the world's top three phonemakers on the world's largest smartphone operating system platform -- Android -- Motorola remains far behind South Korea Samsung Electronics Comp., Ltd. (
) and even the
struggling Taiwanese phonemaker HTC
The American phonemaker's struggles come after a brief resurgence early in the Android campaign. Motorola has suffered from being unable to keep pace with Samsung and HTC in terms of marketing and having a broad high-end handset selection.
Motorola did put forward some strong product of late. One example is the Droid RAZR MAXX, the successor to one of Motorola's better recent sucesses,
the Droid RAZR
Despite the RAZR MAXX impressing, Motorola still sustained heavy losses in Q1
[Image Source: Verizon Wireless]
The bad news with the MAXX is that despite its whopping 12.54 watt-hour battery -- a gargantuan design near 2.5 times the capacity of Apple, Inc.'s (
) iPhone 4S -- Motorola only manages 8 hours of battery life (
), a full hour less than the iPhone 4S. The good news is that 8+ hours is more than any other Android smartphone on the market can muster.
The MAXX also places near the top of the pack in CPU performance (thanks to its Texas Instruments (
) OMAP 4 series CPU) and is acceptable graphics-wise thanks to the PowerVR SGX 540 GPU from Imagination Technologies plc (
), also found in the Samsung Galaxy S with a lower clock speed.
III. Motorola Has Its Work Cut Out For It
Motorola shipped 8.9 million total phones for the quarter, of which 5.1 million were smartphones. That's approximately one-seventh (~14 percent)
of the smartphones shipped by Samsung
Sanjay Jha, chairman and CEO of Motorola Mobility
[press release] the poor performance, pointing to the outstanding RAZR MAXX as a game-changer. He states, "The introduction of RAZR MAXX marked another successful addition to the Motorola product family and contributed to our growth in smartphones. Our Home business delivered another solid quarter highlighted by improvement in year-over-year profitability. We continue to work closely with Google to complete the proposed merger during the first half of the year."
Google may be Motorola's knight in shining armor, but even the software superpower may be unable to save the troubled phonemaker. [Image Source: Not a Fertile Myrtle]
The closing remark alludes to what appears to be Motorola's current hope at this point -- to be scooped up and saved by its shining knight-in-armor Google. But Google's bid to save the damsel-in-distress phonemaker carries no guarantees of turning around the soon-to-be-unit -- it merely provides relief for shareholders.
To compete Motorola will need a lot more models like the RAZR MAXX to flesh out its rather weak Android smartphone lineup. It will also need to
grow share in the world's biggest smartphone market
-- China -- as most of its sales are currently isolated to the U.S.
This article is over a month old, voting and posting comments is disabled
RE: Free advice from someone smarter than Motorolas entire board....
5/3/2012 10:00:26 AM
The problem with this plan is that only so many high-end smartphones can exist at the top of the Android market. Only the very best designs will gain a critical mass following and the rest will be relegated to low volume which would put Moto in a much worse place.
To do this, they would need to guarantee that their designs are the best out there which is not an easy thing to do given the heat of the high-end market, particularly when HTC has stepped up its game to a very high level and Samsung looks poised to do the same.
This could work for them if have an exclusive lock on high-end Android phones for a carrier like Verizon, but I doubt Verizon would do that.
"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs
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