Motorola's higher margin smartphones have better than expected Q1

Motorola's higher margin smartphones have better than expected Q1
More than year ago, with the Motorola name becoming obsolete in the cellphone business, Motorola made the decision to focus on Android powered handsets and things are starting to pay off. Thanks to better than expected sales of higher margin smartphones, and fewer sales of lower margin feature phones, not only did Motorola beat analysts estimates for the past quarter, the company is now saying that it appears likely that they will beat second quarter estimates as well. As for the first quarter, sales in the mobile devices unit dropped 9% to $1.6 billion from the prior year's Q1. The unit did showed a major improvement in the bottom line although it was still written in red ink. The loss for the first three months of the year was $192 million for mobile devices, a sharp improvement from the $545 million lost in the first quarter of the year 2009. Motorola's Co-CEO  Sanjay Jha gives credit for the rebound to the Android OS which he calls "fastest-innovating ecosystem" in the world of wireless. As a whole, Motorola earned $69 million for the opening three month period of the year vs. a loss of $231 million the prior year.

Returning to the world of cellphones, the Schaumburg based company shipped 8.5 million handsets in Q1. 2.3 million of those were smartphones, a niche that Motorola had largely not been present in until Android powered models started shipping last November. Jha says that his company will launch at least 20 new smartphone models this year with shipments expected to be in the range of  12-14 million units. A previous estimate had placed the figure for the low end at 11 million which means that momentum continues to push in the company's favor. Jha says to expect more Motorola devices using the "Droid" name at Verizon. One drawback for Motorola could have occurred just the other day with the launch at Big Red of the HTC Droid Incredible. With a faster Snapdragon processor, this zippy new model has already sold out online inventory and has leapfrogged over the Motorola DROID to become the carrier's new flagship model. Some of the new Motorola Android models being worked on for the U.S. could include the same 1GHz Snapdragon chip, and also increase the size of the display to 4.3 inches from the company's largest screen which is currently 3.7 inches.

source: ChicagoTribune

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