Motorola Shipped 440,000 Tablets In Q2 - InformationWeek

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7/28/2011
05:01 PM
Eric Zeman
Eric Zeman
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Motorola Shipped 440,000 Tablets In Q2

Motorola may have topped Wall Street estimates, but it sold only 440,000 tablets and 4.4 million smartphones in its most recent quarter.

Motorola reported its second quarter earnings on Thursday. The company lost $56 million compared to a profit of $80 million in the year-ago quarter. Revenue for the quarter jumped 28% to $3.3 billion. The company's revenue was higher than Wall Street's expected $3.12 billion.

Looking specifically at Motorola's Mobile Devices business, the unit was responsible for $2.4 billion in revenue, up 41% from a year ago. The company shipped a total of 11 million phones, though only 4.4 million of them were smartphones. By way of comparison, Apple sold 20.34 million iPhones in its most recent quarter.

Motorola announced a number of important handsets during the quarter, including the Droid X2 and Droid 3 for Verizon Wireless. Both phones are follow-ups to previous best sellers. It also announced the Triumph for Sprint's Virgin Mobile brand, and the Photon 4G, a WiMax-equipped Android smartphone for Sprint. The Droid X2, Droid 3, and Triumph are already available, and the Photon 4G ships this week.

Motorola also said that it plans to launch 10 more devices with Sprint through the end of the year. Not all of them will be smartphones. Sprint still runs its iDEN walkie-talkie network, and Motorola is set to provide it with at least one walkie-talkie handset this year.

On the tablet side, Motorola said it shipped (not necessarily sold) 440,000 Xooms. That's a huge increase from the 250,000 it shipped in the previous quarter. Even the combined 690,000 shipped Xooms pales next to sales of Apple's iPad, which shipped 9.25 million in its most recent quarter.

These numbers aren't terrible, but they're not great, either. (Keep in mind, Motorola Mobility is just over six months old. Motorola split into two companies on January 4. Motorola Mobility encompasses the handset and set-top box division, while Motorola Solutions makes and sells enterprise computing products and networking gear.) I am not so concerned with the financial performance as much as I am with the company's product portfolio.

Reason number one: Droid Bionic. Motorola announced the Droid Bionic in January at the Consumer Electronics Show. It was supposed to hit the market by May. Instead, it has been delayed, and delayed, and may not ship now until September. That's embarrassing. It was to be Motorola's first Long Term Evolution 4G handset for Verizon Wireless.

In an attempt to explain why these products are seeing delays, Motorola CEO Sanjay Jha said earlier this year, "It was really a software issue of getting the performance to a place that both ourselves and our partner, Verizon Wireless, were comfortable launching the device[s]. As you understand, there's a great deal of complexity in launching any new technology like this--that was probably the main matter at heart here."

The company still hasn't set a release date for the Droid Bionic. Meanwhile, HTC, LG, and Samsung have all beat Motorola to the LTE punch with Android smartphones of their own.

Reason number two: Xoom LTE Upgrade. When the Xoom launched in February, Motorola promised that it would be updated to LTE before summer. Well, that didn't happen. It now looks like the promised update won't appear until September.

Meanwhile, Samsung announced the Galaxy Tab 10.1 in March, announced there would be an LTE version of it in May, and shipped the LTE version of it Thursday.

Product delays aren't the end of the world, but Samsung is eating Motorola's lunch right now, and Motorola doesn't appear to be doing anything to stop it. Its failure to get these products to market on time has surely cost it sales, and worse, respect.

Motorola seemed to have good momentum going into the split early this year, but its comeback has clearly stalled.

Motorola isn't out of the woods yet, and it needs to get itself on the right path it if wants to claw its way back to a more competitive position.

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