Motorola Mobility reports $86m loss in first quarter of 2012

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Motorola Mobility reports $86m loss in first quarter of 2012

Jennifer Scott

The mobile arm of Motorola has reported a loss of $86m in its results for the first quarter of 2012.

The figure tops last year’s equivalent for Motorola Mobility, which showed losses of $81m in the first quarter of 2011.

However, the company raised revenues by 2% to reach $3.1bn over the three-month period.

Mobile device shipments also looked relatively healthy, with 8.9m tablets, feature phones and smartphones sold in the timeframe. Smartphones alone reached 5.1m sales, up by 24% year-on-year.

However, revenues for its home division – covering its set-top boxes – fell 2% to $884m.    

The company was created when Motorola split in two to become Motorola Mobility and Motorola Solutions in January 2011.

Google announced it was to buy Motorola Mobility for $12.5bn in August 2011. However, the deal has been delayed as both companies wait to get the go-ahead from Chinese regulators.

Ben Wood, analyst for CCS Insight, believes it is these delays that are causing the negative results.

“The key story for me is the fact that the on-going uncertainty around Motorola’s business because of the looming Google transaction is very damaging at a time when the smartphone market is booming,” he told Computer Weekly.

“Also, they have retracted into their home market in the US with Verizon and are only really active in a few other regions like Brazil and China, which is very different to the heady days of the Razr. Every week and month this deal still isn’t finalised, it is eroding Motorola’s reputation.”

A statement from Motorola Mobility said it hoped to finalise the acquisition in the first half of 2012 and Wood claimed it was a case of the sooner, the better.

“Like with the other manufacturers, the emerging duopoly of Apple and Samsung is making it a massive challenge and Motorola is more susceptible, due to its retraction into the US,” he added. 

“We are deeply concerned about their outlook and think rapid decisions need to be made to get it back on its feet.”

So if the company is struggling to make ends meet so much, is this multi-billion dollar deal worth it for Google?

“Some of the figures being bandied around aren’t quite right but, even so, it is a phenomenal valuation,” said Wood. 

“However, given the importance of intellectual property and how much Android now means to Google, the assets Motorola holds are unique.

“It will be down to the benefit of hindsight whether the deal agreed turns out to be value for money.”


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