Motorola will stake its future on developing Android- and Windows Mobile-based smartphones that can compete with Apple's iPhone and Research In Motion's BlackBerry portfolio. Speaking last week in a conference call following the announcement of Motorola's third-quarter results, CEO Sanjay Jha said the beleaguered handset maker will delay a proposed spinoff of its mobile devices unit as it spends the next year trying to develop smartphones that resonate with consumers--central to Jha's plans are the Android and Windows Mobile operating systems, with Motorola hoping to introduce its first handset on the fledgling Google platform in time for the 2009 holiday shopping season. "We have been too focused on bright shiny objects and not on the user experience," Jha said during the analyst call. Critics have long singled out Motorola's proprietary software as the culprit behind its economic woes.
Jha warned investors a Motorola turnaround is at least a year away, and said the firm would shed 3,000 jobs, a little less than 5 percent of its workforce. Motorola reported Q3 losses of $397 million, compared with a profit of $60 million, or 3 cents a share, a year ago--sales fell 15 percent year-over-year from $8.81 billion to $7.48 billion, with the mobile devices division suffering sales declines of 31 percent to $3.1 billion from $4.5 billion a year ago. The unit also reported an operating loss of $840 million, compared with a loss of $248 million in the year-ago quarter. Jha said the mobile devices division will cut $600 million next year--about three quarters of the overall $800 million in cuts planned companywide.
Motorola has yet to officially confirm speculation its Android device will boast a variety of social networking-themed features promising users more direct and efficient access to services like Facebook and MySpace alongside an iPhone-like touch screen and a slide-out Qwerty keyboard. Citing sources familiar with Motorola's plans, BusinessWeek reported in October the company is already showing spec sheets and images of the Android handset to its worldwide operator partners. Motorola is a founding member of the Google-backed Open Handset Alliance, and in late September reports surfaced the firm is seeking to expand its Android development team from 50 members to 350.
For more on Motorola's outlook:
- read this New York Times article