Can Google Android save Motorola's mobile phone business?

Motorola hasn't had a big hit since the Razr in 2004. In cell phone years that was decades ago. Since the RAZR, the company that practicaly invented "mobile" in mobile phone with the Star Tac, has been all down hill. I can't even think of a Motorola device off the top of my head - and I am a gadget freak.

The last Motorola smartphone that was of any significance was the Motorola Q, whose best selling point was its $99 price tag with a plan. It was a thin Blackberry-like device and ran Windows Mobile. Steve Ballmer used it as an example of an iPhone killer in his little rant about why the iPhone wouldn't sell. He was double wrong.

Those lame devices have realy hurt Motorola's bottom line. Today's Q1 results were even lower than investors had feared. Its handset division had lost $509 million in the first quarter of the year, a slight improvement on the $595 million it lost in the fourth quarter of 2008. Sales fell 28%, to $5.4 billion.

Motorola's handset market share has plummeted to 6%.Two years ago, Motorola's global market share was three times that, at about 18%. Three years ago, it was at 25% For the quarter, Motorola's shipments declined a whopping 46% compared to a falling industry average of 13%. Sales of that iPhone that Ballmer was talking about doubled.

The rise of smartphones has taken away Motorola's core business. Windows Mobile doen't seem to be flying off of the shelves. Welcome to Android.


The Motorola Calgary via BGR

While Motorola won't comment directly on handset models, Sanjay Jha, co-chief executive of Motorola and chief executive of Mobile Devices said:

“Customer feedback on our smartphone roadmap remains very positive, and we plan to have differentiated Android-based devices in stores in time for the fourth-quarter holiday season.”

"We also intend to offer a range of devices by delivering those capabilities in both the high tier and the mid tier ... [and] we will deliver meaningful products in the fourth quarter."

The Android lineup will include "entry level data devices.I like to think of rich, data-enabled devices which have capabilities more than SMS. ... One of the things that I particularly like about the Android platform is the very good mobile Internet experience ... I also think multimedia is important."

Will this be too little too late for Motorola? Palm's Pre is on the way out and there is another iPhone expected in June. Blackberry has been swallowing up market share for the last few quarters as well.

Add to this that there are a slew of other top tier device manufacturers in the Open Handset alliance. Samsung and HTC already have devices out and many more manufacturers are supposed to announce new phones this year.

If Motorola can find the kind of innovation that led them to develop the Star Tac in the 90's and the RAZR in 2004, they have a shot. Otherwise, they'll just get lost in the Android shuffle.

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