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Tunrayo
Well, Feory, you can't blame yourself for not owning a Motorola phone for years. ...
Dr. Phil
Grew up with the term..."you can't out run Motorola", a public safety ...
Motorola stages handset comeback
Mark LaPedus
7/26/2010 5:01 PM EDT
SAN JOSE, Calif. -- A handset player is making waves in the market. And it's not Apple, Google, HTC, Nokia, RIM or Samsung.
Believe it or not, it's Motorola Inc. After years' of red ink and lost share, Motorola's handset unit is making a comeback, according to an analyst.
It's Android-based handset line, dubbed Droid X, is apparently a hit. “Following week two (of its official rollout), Motorola's Droid X appears to be off to a good start, fueling confidence in Motorola's handset turn-around,'' said analyst Mark McKechnie of Gleacher & Co., in a new report.
''Our checks reveal strong demand for the Droid X platform, with no supply available at retail as all production is still going to fill 'pre-order' backlog,'' he said. ''Our checks suggest virtually no Droid X phones available in Verizon retail outlets through Sunday, July 25, with limited 're-stock' shipments since the original channel fill.''
In other words, the Droid X is sold out to a large degree. ''Most do not expect supply to replenish retail outlets until early August,'' he said.
Motorola is expected to report its results on Thursday. ''We expect Motorola to update its (calendar) '10 target from 12-14 million Android units to the high-end, reiterate its goal for break-even for the division in Q4, and indicate 'more products to come'by year-end,'' he said.
''Sanjay Jha is making the right strategic moves in handsets, focusing on Android and platforms for the North American, Latin American and Chinese markets,'' he added. Jha is the CEO of the company's handset unit.
The Droid X is not the only product in the lineup. ''In addition, Motorola will keep the iDen business, which we estimate at about $350 million-plus in annual revenue at higher than division average operating margins,'' he added.
Still, the company has challenges. Handset competition remains stiff. Apple and RIM are grabbing share. Motorola, once the cellular-phone king, is now a smaller fish in a big sea.
Thanks to the smartphone, Research In Motion Ltd. (RIM) and Apple Inc. in the first quarter rose to the fifth and sixth positions in the global cell-phone market, according to iSuppli Corp. At the same time, Motorola fell to eighth place, according to iSuppli.
As recently as the first quarter of 2007, Motorola was the world’s second largest cell phone shipper after Nokia. In contrast, Motorola in the first quarter posted a 29.2 percent decline in shipments to 8.5 million units, down from 12 million in the fourth quarter of 2009. This caused the company’s rank to slide two positions to eighth place, falling behind both Apple and Chinese handset OEM ZTE Co. Ltd.
Now, Motorola is coming back amid a major reorganization. Earlier this year, Motorola announced the company is targeting the first quarter of 2011 for its planned separation. Motorola intends to separate into two independent, publicly-traded companies. One will include the company’s mobile devices and home businesses, and the other will include its enterprise mobility solutions and networks businesses.
Jha, co-chief executive of Motorola, will serve as chief executive of Motorola’s mobile devices and home businesses. In mid-July, Nokia Siemens Networks and Motorola announced that the companies have entered into an agreement under which Nokia Siemens Networks will acquire the majority of Motorola’s wireless network infrastructure assets for $1.2 billion in cash.
In April, Motorola reported sales of $5.0 billion in the first quarter of 2010. The GAAP earnings in the first quarter of 2010 were $69 million, or .03 per share, which compares to a GAAP loss from continuing operations of $291 million, or .13 per share, in the first quarter of 2009.
Mobile devices segment sales were $1.6 billion, down 9 percent compared with the year-ago quarter. The GAAP operating loss was $192 million, a significant improvement compared to the operating loss of $545 million in the year-ago quarter.
Believe it or not, it's Motorola Inc. After years' of red ink and lost share, Motorola's handset unit is making a comeback, according to an analyst.
It's Android-based handset line, dubbed Droid X, is apparently a hit. “Following week two (of its official rollout), Motorola's Droid X appears to be off to a good start, fueling confidence in Motorola's handset turn-around,'' said analyst Mark McKechnie of Gleacher & Co., in a new report.
''Our checks reveal strong demand for the Droid X platform, with no supply available at retail as all production is still going to fill 'pre-order' backlog,'' he said. ''Our checks suggest virtually no Droid X phones available in Verizon retail outlets through Sunday, July 25, with limited 're-stock' shipments since the original channel fill.''
In other words, the Droid X is sold out to a large degree. ''Most do not expect supply to replenish retail outlets until early August,'' he said.
Motorola is expected to report its results on Thursday. ''We expect Motorola to update its (calendar) '10 target from 12-14 million Android units to the high-end, reiterate its goal for break-even for the division in Q4, and indicate 'more products to come'by year-end,'' he said.
''Sanjay Jha is making the right strategic moves in handsets, focusing on Android and platforms for the North American, Latin American and Chinese markets,'' he added. Jha is the CEO of the company's handset unit.
The Droid X is not the only product in the lineup. ''In addition, Motorola will keep the iDen business, which we estimate at about $350 million-plus in annual revenue at higher than division average operating margins,'' he added.
Still, the company has challenges. Handset competition remains stiff. Apple and RIM are grabbing share. Motorola, once the cellular-phone king, is now a smaller fish in a big sea.
Thanks to the smartphone, Research In Motion Ltd. (RIM) and Apple Inc. in the first quarter rose to the fifth and sixth positions in the global cell-phone market, according to iSuppli Corp. At the same time, Motorola fell to eighth place, according to iSuppli.
As recently as the first quarter of 2007, Motorola was the world’s second largest cell phone shipper after Nokia. In contrast, Motorola in the first quarter posted a 29.2 percent decline in shipments to 8.5 million units, down from 12 million in the fourth quarter of 2009. This caused the company’s rank to slide two positions to eighth place, falling behind both Apple and Chinese handset OEM ZTE Co. Ltd.
Now, Motorola is coming back amid a major reorganization. Earlier this year, Motorola announced the company is targeting the first quarter of 2011 for its planned separation. Motorola intends to separate into two independent, publicly-traded companies. One will include the company’s mobile devices and home businesses, and the other will include its enterprise mobility solutions and networks businesses.
Jha, co-chief executive of Motorola, will serve as chief executive of Motorola’s mobile devices and home businesses. In mid-July, Nokia Siemens Networks and Motorola announced that the companies have entered into an agreement under which Nokia Siemens Networks will acquire the majority of Motorola’s wireless network infrastructure assets for $1.2 billion in cash.
In April, Motorola reported sales of $5.0 billion in the first quarter of 2010. The GAAP earnings in the first quarter of 2010 were $69 million, or .03 per share, which compares to a GAAP loss from continuing operations of $291 million, or .13 per share, in the first quarter of 2009.
Mobile devices segment sales were $1.6 billion, down 9 percent compared with the year-ago quarter. The GAAP operating loss was $192 million, a significant improvement compared to the operating loss of $545 million in the year-ago quarter.
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Duane Benson
7/26/2010 7:25 PM EDT
Amazing how fast reversal of fortunes can occur in some markets. My first cell phone was an old Motorola analog flip phone. I think they were number one at that point, then dove in market share when digital came out. May favorite phone ever is still my Motorola Razr from their most recent pre-bust boom time.
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Frank Eory
7/26/2010 8:26 PM EDT
I haven't owned a Motorola phone in years -- ironic, since I used to work for them -- but my wife got up early on the 15th and stood in line at the Verizon store to get a Droid X. I must say I'm really impressed and can't wait to get one of my own!
This really does look like a winner for Motorola and for Verizon too. Verizon has never had a smartphone on which web browsing was compelling enough for me to willingly pay for unlimited data...until now.
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Tunrayo
7/28/2010 8:54 AM EDT
Well, Feory, you can't blame yourself for not owning a Motorola phone for years. Motorola seems to have stopped competing for market share in the mobile phone market for some time now.
Motorola used to be one of the foremost high-tech companies in the world. I remember the good old days in college when we learned about the Motorola 68000 series microprocessors. I remember Motorola making computer chips and ICs that fuelled the growth of the high-tech industry in the US and indeed around the world. I remember when Motorola was the worlds second mobile phone producer behind Nokia.
Motorola's status as a high-tech giant was greatly affected after the Iridium project. It was a pain to have spent about $9 billion and not be able to effectively market the product.
Nevertheless, I hope it can really launch a comeback into the mobile phone industry and other sectors for that matter. I hold Motorola very high in my heart ... high up there with the Apples, and the Qualcomms, and the Googles ... these are the companies that really brought innovation to the world and improved human life in general.
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goafrit
7/26/2010 10:06 PM EDT
Motorola may not have it in them anymore. They used to have it. I personally think the pareto principle is working against them. The best 20% does the job and influences the rest of the team. It does not seem that the firm still have smart stylists. The engineers are there, but the ergonomics is not there. To get the big Moto back, they need to hire stylists and begin to rock the world again. The days of Razr cannot come back without a radical reshaping in the team. I always mean this: these firms do not have women in their teams. Yet, women buy phones. Time to get the ladies contributing.
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selinz
7/26/2010 11:13 PM EDT
I'm glad to see Motos success with the Droid. I hope that they also have an egg in the upcoming windows mobile basket as well. But the indications are mixed. They seem to be becoming as associated with Android as much as Google itself. I have no doubt that they "have it in them," as the previous contributor suggested. Time will tell...
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ylshih
7/27/2010 8:51 AM EDT
It would be great if Moto made a comeback, but I suspect this is just a small step that might lead to a comeback. There still seems insufficient differentiation to establish a basis for sustained advantage in a highly competitive market.
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deyyoung
7/27/2010 1:07 PM EDT
My experience with Moto phones of late has been horrific, so it will take a lot to win me back over. Shoddy build quality and atrocious UI designs! I hope they have changed, but I won't hold my breath.
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beijiner
7/27/2010 2:12 PM EDT
Moto still has a long way to go, this is a typical example of "too big to change" in the very competitive cellphone business, and I hope Sanjay, with his strong background from Qualcomm, will continue to lead Moto back out of the ditch it created with miss-management and wrong strategies of the past
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Dr. Phil
7/27/2010 3:07 PM EDT
Grew up with the term..."you can't out run Motorola", a public safety term..grin, I agree with ylshih and hope for them to come back in some way. We lost one of the best RFI / EMI research labs that Moto had down in Fla. all due to their "downsizing" 5-6 yrs ago. They will have to learn to be lean though, and energetic with the existing resources. In other words the 90% that watched the 10% "do it"...better get busy.
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