Following Motorola Inc.’s handset division has this commentator feeling kind of manic-depressive. The latest is scoopage from the Wall Street Journal that co-CEO Sanjay Jha, poached from Qualcomm Inc. back in August to turn the handset biz around, will on Thursday announce thousands of layoffs, along with news that Moto will embrace the Google Android OS going forward.
Layoffs are sure to become a normal cost of doing business as the economy spirals (I know, that’s cynical — but true), but this news is particularly painful considering the slings and arrows Moto’s already been through. Let’s review: news of a planned spinoff of the handset business early this year; ongoing market share slippage; a surprise second-quarter profit; a bright new CEO for devices; a late launch of a touchscreen competitor; countless snide analysis pieces about how it can’t move fast enough for the market; layoffs; new manufacturing processes (that’s the Android part—I’ll get to that in a minute); and, I imagine, hail Marys in the back room. In short, some highs but a lot of miserable lows too.
Jha’s plans will be included in the earnings report due tomorrow, and are targeted squarely at restoring long-term profitability for the division — if successful, maybe he’ll be able to avoid the spinoff. Motorola, according to the WSJ report, lost “an average of $12 for each of the 28.1 million phones sold last quarter.” Ouch.
The irony is that the RAZR (specifically, the V3) continues to be the top handset model in not just the U.S. but the world — still wildly popular despite being around for a few years now. And a recent Admob Mobile Metrics report reveals that Motorola still has huge dominance stateside with it claiming four of the top five handset positions.
The RAZR is widely seen as Motorola’s boon and its bane — the thin, sleek device turned the feature phone market on its ear with the combination of fashion sense, ease of use and consumer functionality; it also became overexposed, over-copied and something of a crutch for the device maker, who was seen as sitting on its RAZR laurels.
So what gives? Clearly, Moto needs to take some costs out of production and research and development, which the embrace of an open(ish) OS stack like Android will help foster. It also will need to, as those snide reports insinuate, keep up with the consumer application-driven market being created by the iPhone and the T-Mobile G1 to help it move beyond its embedded position into capturing more revenue from upgrades.
Mr. Jha, I look forward to your remarks.
