Motorola Mobility (NYSE:MMI) announced it will report results below expectations for the fourth quarter--typically the company's biggest quarter--a situation it blamed on "increased competitive environment in the Mobile Device business and higher legal costs associated with ongoing Intellectual Property litigations." The results are notable in how they contrast to those from Samsung, which is likely to post record quarterly smartphone sales and last week reported a 73 percent spike in overall operating profit for the fourth quarter, as profit rose to $4.5 billion. Apple (NASDAQ:AAPL) too is expected to report solid fourth quarter results on the back of the release of its new iPhone 4S.
ChangeWave Research figures show declining interest in smartphones from Motorola and HTC. Click here for more.
Motorola joins HTC, another Android smartphone licensee, in the doghouse; HTC too said it would report a lower-than-expected fourth quarter due to intense competition.
Motorola estimates it will report sales of $3.4 billion "with modest profitability on a non-GAAP basis." Reuters reported the figures were below analyst expectations for revenue of $3.88 billion.
In the fourth quarter, Motorola said it expects to report shipments of around 10.5 million mobile devices, of which approximately 5.3 million were smartphones. That's compares with the 11.6 million mobile devices, including 4.8 million smartphones, Moto shipped in the third quarter and the 11 million handsets, including 4.4 million smartphones, it shipped in the second quarter.
Google (NASDAQ:GOOG) last year announced it would acquire Motorola for $12.5 billion, largely as a way to protect its Android smartphone operating system from patent attacks by shielding it with Motorola's extensive patent portfolio. Motorola said it continues to expect Google's acquisition of Motorola to close "in early 2012."
That Motorola suffered in the fourth quarter likely will give investors and others in the market pause, since Motorola made a strong showing during the period with products like the Droid Razr and Droid Bionic. Verizon Wireless (NYSE:VZ) is selling both those gadgets in the U.S. market.
Interestingly, ChangeWave Research released findings from monthly surveys of consumers that underscore the problems that Motorola and HTC have found in the market. According to the firm's research, interest among smartphone shoppers in products from Motorola and HTC peaked in June 2011 and has been on the decline since. The numbers show that just 7 percent of consumers planned to purchase a Motorola smartphone in December 2011, and just 3 percent of shoppers planned to purchase an HTC smartphone during that month.
- see this release
- see this Reuters article
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