Can Google save Motorola?

By Sam Diaz

Motorola’s mobile handset business - once a possible spinoff - has become so sick that it really is starting to infect the rest of the company. The company’s fourth quarter financials, reported Tuesday, really stunk. But the numbers that were hardest to swallow came from the mobile division: $2.35 billion, down from $4.81 billion a year ago, and an operating loss of $595 million.

So the big question becomes: Can Google save Motorola?

In the Q&A period of a conference call with analysts, Motorola execs were asked about the commitment to Windows Mobile, given the company’s interest in Google’s Android OS for 2009. Sanjay Jha, company co-CEO and CEO of mobile devices, replied:

Yes, we are still committed to Windows Mobile. As you know, Windows 6 series is available in 2009 and as compared to Android, we believe in 2009 Android is more competitive; more of our effort and focus in 2009 is going to Android, but in 2010 when Windows 7 will become available, we will then participate in a more focused way in Windows Mobile 7 in 2010.

In the smartphone race, all eyes have been on Apple’s iPhone and RIM’s Blackberry in recent weeks. T-Mobile’s G1 remains the only Google-based phone on the market but that’s expected to change this year as others come out with devices utilizing the open-source Android.

It’s tough to say how Android will impact Motorola’s mobile business. Larry Dignan says that one thing Motorola needs to do is simplify its mobile handset portfolio. Simply adding Android phones doesn’t necessarily make the portfolio more attractive - but it could make it a bit more exciting.

Still, getting those phones into the hands of the users this year will be key. Just as we’ve seen with the iPhone and the Blackberry, so many businesses and customers these days are being lured into wireless contracts by the slick and flashy mobile devices themselves. (Personally, I wasn’t feeling very ooh-aah about the G1 so it really was never a contender for my attention.) But, given the economic uncertainty out there, a lot of it comes down to marketing and promotion.

Motorola and the wireless carriers are going to have to be creative about getting those devices in the hands of customers - such as the installment plan that T-Mobile is offering for the G1. If they can develop an eye-catching phone that’s feature-rich, affordable and on a strong wireless network, then customers may be willing to give Google - er, make that Motorola - a chance.


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Author`s name Alex Naumov