When my colleague Andrew Berg read my article on Motorola’s earnings earlier this morning, he yelled over the wall separating our two desks to point out that despite the 24 percent drop in handset sales, Motorola is actually doing pretty well for itself.
After a little while, I agreed. Here’s why: For a moment, let’s ignore for the precipitous drop in sales. Motorola has introduced several well-received devices based on Google’s Android, which was recently predicted by IDC to grow faster than any other operating system over the next four years. Motorola says it will launch at least 20 – that’s right, 20 – smartphones over the next year. Motorola clearly aims to ride the Android wave back into profitability.
Motorola is going after the high-end market, a marked shift away from the mass market appeal of the RAZR. Amazing as they may be, high-end smartphones just don’t ship in quite the same volumes as lower-tier devices: Of the 12 million handsets Motorola shipped last quarter, just 2 million were smartphones. Motorola’s double-digit sales decline could be attributed as much to its shift to a high-end product mix as it could be attributed to the slackening popularity of its other devices.
Motorola also says it will continue to evolve its MOTOBLUR platform, which syncs conversations, contacts and content from social media sites. The intuitive UI has proved popular among consumers, and Motorola’s pledge to improve the platform is a step in the right direction.
On the financial side, Motorola’s handset division continues to struggle but its cash hemorrhage has slowed to a trickle. The company cut the division’s full-year losses in half and was just $132 million in the red for the fourth quarter. It’s a lot of money, yes, but a vast improvement over last year’s loss of $595 million.
As for Motorola’s two other divisions, the figures there are also a bit deceiving. Sure, sales declined, but the infrastructure market as a whole is contracting. Both segments were well in the black for the fourth quarter, which is more than can be said of some of its larger network brethren.
Rumor has it that Motorola has put its break-up plans on hold. Perhaps Greg Brown and Sanjay Jha will succeed in pulling Motorola’s handsets into profitable territory after all.