Google's Q1: Motorola Mobility questions abound

Google's Q1: Motorola Mobility questions abound

Summary: Motorola Mobility's market share is declining. What is Google going to do about it?


Google reports its first quarter results Thursday and questions about the search giant's plans for Motorola Mobility will surface.

The company is expected to report first quarter earnings of $9.65 a share on revenue of $8.15 billion excluding traffic acquisition costs. The focus will be primarily on Google's paid click rates, but analysts will be antsy about Motorola too. Unfortunately, Google executives aren't likely to say much given Chinese regulators are holding the deal up.

While the Motorola Mobility deal is mired in limbo, market share for the device maker continues to decline. The big question: Should Google ditch Motorola's operations?

Piper Jaffray analyst Gene Munster outlined the Motorola Mobility issues. What will Google's roadmap for Motorola Mobility look like?

He said:

Given that investor focus has been on the impact of Motorola on margins, we believe that if Google were to outline an operational/financial roadmap for the acquisition, it would likely have a positive impact on Google shares. However, we believe once investors move past the impact to margins, the true concern may be fundamentals at Motorola. We note that Apple and Samsung have emerged as the clear leaders as smartphone providers. The pair provided 46 percent of all smartphone sales in Q411, up from 38% in Q3. Motorola's smartphone market share decreased from 4% to 3% in the same period. If Google is serious about keeping Motorola as a part of its business, we believe the company must address the issue that Motorola does not seem to make devices that consumers want.

The solution here is relatively simple. Google will have to get better hardware designs from Motorola and hand it the latest Android releases. The catch is that Google partners will be annoyed.

Good luck with sorting that one out Google.

Topics: Mobility, Google, Hardware, Security, Smartphones, Wi-Fi

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  • it's not just about selling devices either...

    Moto can't make a profit selling devices.. they are clueless how to make money in this environment... they have just barely broken even or lost money since the day they were spun off 2+ yrs ago.. same for LG... same for Sony (formerly S-E)...

    what is missing from this article is the profit share for Apple and Samsung.. together they suck up 90% of all cell phone profits.. with Apple sucking up 75% all by itself.. and that's ALL CELL PHONES not just smartphones.. unless you are Apple or Samsung.. the cell phone business is just not a very good business to be in..
  • Motto will do great

    as soon as it will join google's brainpower.
    The Linux Geek
    • yes, because Google has shown itself to be great at consumer products...

      GoogleTV = FAIL, Google Branded Nexus = FAIL... android tablets = FAIL.. Amazon had to remove every hint of consumer facing element that Google put on there to get decent sales... blind leading the blind is what I see... even for all the numbers of android phones being sold out there.. Samsung is the only manufactures that is actually able to turn a profit selling Android phones.. everyone else is braking even or losing money on them..
      • Hard to take you seriously

        Obviously you have a very strong bias. You state "Amazon had to remove every hint of consumer facing element that Google put on there to get decent sales..." That is stupendously incorrect. The success of the Fire is in spite of the lack of desired google features, not because they were left out. Do you think people wouldn't love gmail and google maps or access to the google play store? What are you smoking? Amazon's success has to do access to Amazon content, low price, and large existing customer base. You say "blind leading blind" but I say you are myopic.
  • The answer is obvious

    The answer for Motorola Mobility is blatantly obvious. Leave the consumer market to Samsung, HTC and Sony to keep them happy, and use Moto as a vehicle to expand Android/Google Apps into the enterprise.
    Pre-install additional security features like Device Policy, encryption, backup, and find out what else enterprise customers are looking for both in the phone and tablet markets. Who cares if they don't make a profit? It's all about expanding the Google ecosystem.
  • The blunt facts are that, Motorola Mobility is just good for the IP that

    comes with the purchase, and the hardware side is a loser. Google will have use for the IP, but, the hardware side is a loss. Goodbye, Moto!
  • Google has options...

    Google sounds like they want to use Motorola to focus on the enterprise market.

    But hardware is not Google's core business, so it could always sell the manufacturing business. Companies like Huawei seem to be interested and it seems like their backup plan.