The VAR Guy

While the mobile world was caught up with what RIM’s new CEO wasn’t doing, Motorola published its Q4 2011 financial results. Although most numbers were positive, Motorola did post mobile losses ahead of its impending acquisition by Google. Here’s a quick look …

Overall, Motorola’s Mobile Devices division posted a GAAP operating loss of $70 million for Q4 2011, which was a dramatic drop from the earnings of $72 million in Q4 2010. Motorola chalked up the loss to an “increased competitive environment,” but I’m here to ask the question — does this loss matter? It may not.

According to the earnings release, Motorola and Google’s nuptials will cost “$40 per share in cash, or a total of approximately $12.5 billion.” That acquisition, set to close after various legal red-tape clearances, will put Motorola in a position where $70 million in losses could be a drop in the bucket. In fact, Motorola’s losses may be beneficial for Google’s potential reshaping of the Motorola Mobility pipeline, despite promises that Motorola will be run independent of Google.

I’ve speculated in the past, and continue to believe, that Google’s eventual plan with Motorola is to let Motorola produce its Android product lineup until the roadmap ends, after which Google will pick up where Motorola left off and run the show behind the scenes. Last year, 2011, saw the release of the Motorola DROID RAZR along with the Motorola Xyboard, (a.k.a., Xoom 2 tablet). While these devices have received generally positive reviews, they are awash in a sea of ever-expanding but hardly differentiated Android devices. Is this the “increased competitive environment” Motorola is talking about? Unlikely. I’d point a finger at Apple.

Since Google’s acquisition of Motorola is supposed to “supercharge” Android, I would guess that by the end of 2012, a considerable shift in the Android landscape will take place with Motorola somewhere at the forefront. If Motorola offers Android 4.0 Ice Cream Sandwich devices that are slicker than their competition, Motorola could recoup much more than its losses and even see a rise in prominence again (like it did in 2009 with the first DROID).

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