Motorola Mobility CEO Sanjay Jha says his company is already seeing a slowdown in sales ahead of Verizon's launch of the iPhone.
The Verizon iPhone, which is only a few days away, is dinging Motorola Mobility sales. This issue is a big deal for Motorola Mobility since the company is still dependent on Verizon and its LTE 4G phone---the Bionic---won't ship until the second quarter. In a nutshell, Motorola Mobility has another quarter to sweat as the plan to sell mid-tier smartphones---the Bravo and Defy---have been disappointing.
Here's what Jha said on an earnings conference call following Motorola Mobility's financial results:
Certainly since the announcement of the iPhone, we have seen a little slowdown in our sell through of our devices because there's clearly an anticipation of some devices coming to Verizon. So we have seen that effect even prior to the iPhone launching. But I think we continue to feel that when the door swings occur, consumers coming to Verizon's stores, that are being offered the choice that they're being offered by Verizon -- because the fundamental principle that Verizon has stuck to it is that they want to offer choices to their consumers. As the consumers come into the store, they will see a choice, and I think time will tell as to what percentage of those door swings actually translates to which brand purchase. But I think we have seen some slowdown as a result of the announcement from Verizon.
I'm not yet convinced that Verizon will not continue to push forward with DROID as a franchise. We have a good relationship with Verizon. In terms of diversification in the US, you're seeing the launch or at least announcement of ATRIX 4G at AT&T. You'll see us diversify in retail channel as well as with other carriers in the US.
There's little reason to think that Verizon will abandon the Droid franchise. Verizon execs said Tuesday there's no way the company will be a one-device carrier and touted a range of LTE devices on deck. Given the timelines outlined by Motorola Mobility, the first quarter will really be about the launch of the Xoom tablet. Jha was asked whether Android 3.0 Honeycomb was ready for lift off. Jha said:
The launch of XOOM continues to be in February. I think it is possible that there will be a very modest variation from that. But our anticipation is that we will launch fully functional commercial 3G XOOMs with Verizon in February. I'm pretty confident that you will see some very good applications and services. But I should also say that in working with Google, we will continue to add new services to this device through the course of it. And of course all of these XOOM 3G tablets are upgradable to 4G. The Verizon 3G tablets are upgradable to 4G LTE.
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