During Motorola's earnings call early today co-CEO Sanjay Jha revealed that the company's plans to launch smartphones based on Google's Android platform remain on track, and that Motorola had signed contracts with two major, unnamed U.S. carriers to launch the phones in the fourth quarter. Additionally, Jha said Motorola would release more Android phones in the first quarter of 2010. The phones will incorporate "integrated contact and message management, multimedia and social collaboration," Jha said.
Motorola posted a net income of $26 million in the first quarter, up from the net income of $4 million the company recorded in the year-ago quarter. The company's weakened handset division remained in the red, but managed to cut its operating loss in half.
The company's overall revenue was down 32 percent to $5.5 billion. Motorola's handset division had sales of $1.8 billion, down 45 percent from the year-ago quarter and flat from the first quarter. The division's operating loss narrowed to $253 million, improved from an operating loss of $346 million in the year-ago quarter and improved 50 percent from $509 million in the first quarter.
Motorola's stock was up almost 10 percent on the news to around $7.15 per share.
Motorola shipped 14.8 million handsets in the quarter, up slightly from the 14.7 million it shipped in the first quarter, but down more than 47 percent from 28.1 million in the year-ago quarter. The company's handset market share dipped to 5.5 percent, down from 6 percent in the first quarter. Motorola's average selling price was $124, essentially unchanged from the first quarter. Click here to see how Motorola stacked up against rivals in the second quarter.
Android update: Jha said Moto's Android phones would also ship to international carriers, in addition to the two already signed U.S. carriers. Motorola will push Android to multiple price points and intends to "take Android as low down the feature phone tier as best as we can," Jha said.
"The devices we are launching for the holiday season will get us back in the game in smartphones," Jha said. When asked if Motorola's carrier partners would give "hero" status to the company's Android phones, Jha said Motorola "would let carriers announce what status they want to accord these devices." He said carriers understand that the smartphone market will be very competitive and that they "can't just throw out devices and let them sink or swim."
Forecast: Motorola said that its third quarter sales would be comparable with this quarter, but that shipment volumes were likely to be down. Additionally, Jha said the handset division's operating loss would continue to narrow. In 2010, as Motorola more on smartphones, it will work more closely with its ODM partners to produce voice-centric feature phones, he said. The company still plans to spin off the handset division, but that will depend on its performance, the economic environment and stability in the mobile handset marketplace, Jha said.
- see this WSJ article (sub. req.)
- see this release
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