Amid the hubbub over Verizon's iPhone and the war with AT&T one of the biggest winners not named Apple may be Motorola Mobility.
Motorola Mobility entered 2011 with significant questions. CEO Sanjay Jha had to diversify, innovate and now has to battle for shelf space at Verizon. What a difference two weeks makes. The cards have mostly broken Motorola's way.
The more I think about Motorola Mobility's prospects the more bullish I become. Note I'm not predicting that Motorola Mobility is going to be a profit juggernaut---it still plays in a rough hardware neighborhood and has some serious earnings risk as Verizon starts pushing iPhones. But from a product and strategic perspective Motorola Mobility is well positioned. At the very least, Motorola Mobility is setting itself up as a nice takeover target.
Here are five reasons I'm upbeat on Motorola Mobility's prospects:
Motorola Mobility has diversified with AT&T. Let's say this AT&T-Verizon war plays out as expected. AT&T will poach Android customers. Verizon will poach AT&T's iPhone customers. The comical reality of that Verizon and AT&T marketing war over the iPhone is that the two wireless giants just might cancel each other out. Motorola will make up some of its lost sales at Verizon with AT&T.
Motorola can ride the Android rocket. Now that the dust has cleared on the Verizon iPhone rollout it's fairly clear that Android isn't going to lose market share. In fact, the Android express will keep rolling as will Apple's iOS. Both of those gains will come at the expense of Research in Motion. Kaufman Bros. analyst Shaw Wu said Android is getting its first big test. He said:
Our checks with industry sources indicate that Verizon will put heavy promotion behind the iPhone, likely ahead of its other platforms including Android. On its homepage, it is already highlighting the iPhone 4 and iPad as flagship products with not much else in sight (save for a Jabra Bluetooth Headset).
As we said before, we believe iPhone on Verizon will be the first true test for Android whether its share gains are real or just a temporary phenomenon due to weak competition. While there will be a lot of focus on whether iPhone users move from AT&T to Verizon, we believe the more interesting question is how many Android users on Verizon decide to switch over to iPhone, now given a choice.
If you think Android will hold its own (as I do) then Motorola Mobility is a clear winner.
The Xoom tablet looks promising. Let's face it: Apple has the tablet field to itself with the iPad. Android tablets have been disappointing thus far. And the field at the Consumer Electronics Show was hyped way too much. One bright spot was Motorola Mobility's Xoom tablet. This tablet will be among the first with Google's Honeycomb Android OS and has a puncher's chance of making inroads. Simply put, Xoom's arrival in March can give it an early mover advantage in the Android tablet market. Related: Motorola Xoom (hands-on photos), Video: Google quietly unveils Android 3.0 'Honeycomb'