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Motorola's losses increase as its waits for Google

Razr Maxx was its stand-out handset but shift to premium models is slowed by competition from Samsung and HTC


Published: 3 May, 2012

READ MORE: Financial | Motorola | Handset | Android

Motorola Mobility is suffering from the transition period as it endures the long wait to be officially acquired by Google. The handset and set-top box maker announced a loss for the first quarter, as its device shipment volumes fell.

The company has been overshadowed in recent months, in terms of bighitting new devices, by launches such as the HTC One X, and while it has been prioritizing high margin gadgets over volumes for several years now, the resulting drain on volumes should by now have levelled off. However, the firm shipped 4m fewer handsets than in the year-ago quarter, at 8.9m units, and is still selling a considerable number of featurephones, despite its smartphone-only strategy. Within the total, 5.1m units or 57% were smartphones, though this percentage was up sharply on 44% a year earlier.

The vendor said it had shipped just 100,000 tablets in the quarter, down from 300,000 in the same period in 2011 (and 200,000 in Q411).

North America remains Motorola's biggest region, accounting for 54% of revenue, followed by Latin America on 21%. The firm virtually pulled out of Europe when it underwent its massive restructuring prior to being split off from Motorola Solutions, but the relative lack of impact in Asia is concerning, given that China and India are huge sources of growth (as seen in Apple's results) and were traditionally strongholds for the Motorola brand. However, the firm did launch the budget Motoluxe model in China, as well as in Europe and Latin America, during the quarter. The other launch highlight was the Razr Maxx, which revives the company's most iconic brand and successful device of recent times.

The handset business suffered an operating loss of $121m, compared with a year-ago loss of $89m, on revenue of $2.19bn, up 3% year-on-year. On a group level, including its home business, Motorola reported a net loss of $86m, wider than an $81m loss a year earlier, on revenue up 2% to $3.08bn.

Motorola repeated its confidence that the Google acquisition, for $12.5bn, would close during the first half of the year. It is still waiting for approval from Chinese authorities, having been cleared by the US and Europe.

New figures from researchers at comScore showed that Motorola has about 13% of the handset market, down by 0.5%.

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