With the help of heavy cost-cutting and healthy smartphone shipments, Motorola has managed to turn around a loss a year ago and deliver a small profit for the fourth quarter of 2009. However, its mobile device business is still struggling with weak overall sales.As a whole, the cell phone maker reported its second consecutive profitable quarter with a net income of $142 million, a reversal of the $3.7 billion in the same period of 2008. Yet, sales for the quarter were disappointing, showing a 20-percent year-on-year decline to $5.7 billion.
This quarter also marked the introduction of two Motorola smartphones running Google’s Android mobile platform, the DROID and the CLIQ. The DROID has been particularly well received, contributing much to the 2-million smartphone shipments for the three-month period. However, overall handset sales were lower than expected at 12 million units, down from 19.2 million in the year-ago quarter.
Apparently, the success of its Android smartphones alone was unable to save the situation, as Motorola’s Mobile Devices segment saw a drop in net sales from $2.35 billion a year ago to $1.8 billion. Furthermore, the manufacturer’s share of the global handset market slipped from 6.5 percent to 3.7 percent.
"We are just at the beginning stage of our transition to a smartphone company, and we have a lot of work ahead of us," said Sanjay Jha, co-CEO of Motorola and CEO of Motorola Mobile Devices. The company is planning on expanding its portfolio by releasing 20 smartphones in 2010, with four Android based devices arriving this quarter. Jha estimates smartphone shipments for the whole year to be between 11 million and 14 million units.
Motorola’s effort to save its mobile business by hugely investing on the Android platform is on the right track. However, considering its year-end results, it looks like its full comeback is going to take much longer than we expected.
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