Motorola has wagered much of its handset division's future on Google's Android platform, but its strategy may not include making a big splash in the high-end smartphone segment when it debuts its Android phones later this year.
Instead, to reverse slumping market share and plummeting revenues, Motorola may focus on the mid- and low-range of the phone market with its forthcoming Android devices. "There's a lot of competition in the high-end category and not a big movement to address the lower price points," Avian Securities analyst Matt Thornton told BusinessWeek. "It's a smart move. Motorola needs to be more near-term and start making some money."
Even mid-range smartphone sales could boost Motorola's margins. Barclays Capital analyst Jeff Kvaal told BusinessWeek that he estimates that Motorola's new smartphones could boost the company's overall average selling price for handsets to $147 in the fourth quarter, up from $123 in the first quarter. According to Kvaal, Android launches could grow Motorola volumes by 20 percent to 70 million units next year.
Motorola declined to comment to BusinessWeek about its Android plans.
It appears that Motorola's efforts are bearing fruit. According to a recent report in the Wall Street Journal, T-Mobile USA and Verizon Wireless will launch Motorola-made Android phones before the end of the year, news that dovetails with comments Motorola executives made earlier this year.
In late April, Motorola co-CEO Sanjay Jha said the company would have Android devices on the market by the end of the year with multiple carriers, and not just in North America. "We are in detailed discussion with multiple carriers around the world," Jha, the head of Motorola's mobile devices division, said at the time. "It won't be one carrier in one region. It will be multiple carriers in multiple regions."
- see this BusinessWeek article
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