Motorola to focus on next-gen smartphones

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Motorola to focus on next-generation technology in competitive smartphone battleground

Motorola will focus on the development of next-generation smartphones after recording declining sales in its mobile devices segment during the second quarter.

Sales in mobile devices were down six per cent year-on-year to $1.7 billion, shipping 8.3 million handsets during the three months, including 2.7 million smartphones. Motorola bought a number of phones to market during the quarter, including the Droid X, Flipout and Charm, taking its total number of smartphones to 12.

Operating earnings for mobile devices increased from a loss of $287 million in the second quarter of 2009 to $87 million, thanks largely to a legal settlement of $228 million which is likely to have come from the settlement of its technology dispute with BlackBerry manufacturer Research In Motion.

In June, the pair said they had signed a settlement and license agreement that includes cross-licensing of patents for 2G, 3G, 4G , 802.11 and wireless email technologies. This ended “all outstanding worldwide litigation between the two companies”.

Home segment sales were also down, 13 per cent to $886 million, although operating earnings were up $11 million to $29 million. New products were brought to market in this segment as well.

Motorola co-chief executive and Motorola Mobility chief Sanjay Jha (pictured) said: “As we continue to execute on our business strategy, we are in a strong position to continue improving our share in the rapidly growing smartphone market and improving our operating performance.

“The mobile devices and home businesses remain focused on developing next-generation products to capitalise on the convergence of mobile experiences and home entertainment.”

Enterprise mobility solutions faired much better for Motorola during the quarter, increasing sales by 10 per cent to $1.9 billion and growing operating earnings by $40 million to $181 million year-on-year.

Other co-chief executive Greg Brown, also chief executive for Motorola Solutions, said enterprise mobility will be a strategic focus for Motorola, particularly after the sale of the majority of its network business, which saw sales down two per cent in the quarter, to Nokia Siemens Networks.

Brown said: “[The sale] is great news for our customers, our investors and our people and will allow us to sharpen our strategic focus on providing mission- and business-critical solutions for our government, public safety and enterprise customers.”

Overall, Motorola sales were down from $5.5 billion to $5.4 billion in the quarter but net earnings grew from $26 million to $162 million.

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