Motorola Mobility's Verizon Dependence ...
... is a bit scary. Sanjay's company has done a nice job with Android smartphones and his focus of sticking to one smartphone HLOS is very sensible for them given their volumes. Accounting in the weak US dollar gives them an edge (here and overseas). ASP's and margins have improved and they are borderline profitable but they have pulled back dramatically from overseas markets. Their overall unit volumes and share keep slipping dramatically however and with that their economies of scale are out the window. They are traversing a rather slope.
>> Motorola Mobility Banks 28% of Sales on Verizon Wireless
Nick Marshall
Electric Pig (UK)
February 23, 2011
electricpig.co.uk
In the midst of the Nokia Microsoft alliance, better known as “NokiSoft”, Motorola Mobility has revealed that 28 percent of handset sales originate from one carrier, Verizon Wireless. These details were contained in Motorola’s SEC filing and with the Xoom launching in two days, investors may be watching sales closely.
Outside of the US, the launch of the iPhone 4 on Verizon Wireless captured little interest. For Verizon customers, this was a dream over three years in the making. For now, we can only speculate as to how many handsets were sold since neither Apple nor Verizon has come forward with exact figures. Regardless, Motorola is keeping a watchful eye on Apple’s success.
With 28 percent of Motorola’s handset sales depending on Verizon Wireless, the company will face its ultimate test in 2011. The Droid, Droid 2, Droid Pro and Droid X fueled tremendous growth for Motorola, almost to the point of the RAZR days. The iPhone 4 and upcoming iPhone 5 may jeopardize a fruitful future..
Whether or not the US market is of personal interest, on a global scale, the success of Motorola and their Android portfolio is significant. The Motorola Xoom, Droid X 2, Droid Bionic and Atrix 4G look to be some of the most compelling products in recent memory. If a significant portion of Verizon Wireless customers change their allegiance it could become an unfortunate situation.
Surely we can’t predict the future, but as smartphone enthusiasts we welcome competition. Will Motorola’s portfolio of devices announced at CES and MWC be enough to keep Verizon Wireless customers loyal in 2011? Sound off. ###
>> For Every $100 In Sales That Motorola Makes, $28 Is From Verizon [Eggs In A Basket]
Stefan Constantinescu
IntoMobile
February 21st, 2011
intomobile.com
Motorola’s story throughout the years has been riveting. The firm practically invented the mobile phone, had several iconic products including the StarTAC and RAZR, but then all of a sudden thing just stopped working. They got too big, too confident, found a forumla that worked for them in the past, and just kept on executing it despite getting less and less money each quarter. That all changed when Motorola announced it would split up, that the mobile division would become their own unit, and that the new CEO, Sanjay Jha, who used to work at Qualcomm, would bet the future of the company on Android. Things have indeed paid off, and while Motorola isn’t the size that it once used to be, they are making money, and they’re making products that people love. The various DROID devices on Verizon have been a smashing success, so much so that during 2010 about $28 for every $100 Motorola made in sales came from that sole operator. That figure used to be 17% in 2009 and 13% in 2008. During those 2 years revenue from Sprint measured 13% and 7% respectively.
The company needs to ask themselves though, is this healthy? Their smartphone strategy isn’t in their hands. It’s all Google. They dictate release dates, features, everything. MotoBLUR, created in an attempt to differentiate Motorola’s products versus the slew of other Android devices on the market, is just a terrible and shows how difficult it is for them to grasp good software. Verizon, what if one day they wake up and say to themselves that they need more Samsung products in their portfolio, or what if LG catches up to the competition in 2011 and 2012 with their awesome new devices, where does that leave Motorola?
Over in Europe and Asia Motorola devices don’t have the same levels of respect that Nokia and Samsung have, and it may pay off to try and change that image, because as it stands it looks like Motorola has all their eggs in one basket. ###
- Eric - |
