Motorola Betting it All On Google
by
Cassimir Medford
on
29 October 2008, 11:47
Categories:
Media
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Communications
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Internet
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Finance
Topics:
google
,
linux
,
motorola
,
symbian
,
Windows Mobile
,
Android
,
sanjay jha
,
Cassimir Medford
,
Bonny Joy
The mobile world expects Motorola to announce major job cuts and disappointing numbers when it reports its third-quarter earnings Thursday.
But analysts also expect a clear strategy statement from co-CEO Sanjay Jha on the future of the company's handset business and some indication of exactly where the job cuts and cost reductions will be focused.
Despite its problems Motorola is still a major player in the mobile market, and while it is facing challenges from South Korean rivals Samsung and LG, it is still the leading mobile phone maker in the North American market.
Some analysts expect the Schaumburg, Illinois-based handset maker to narrow its software focus to Android and Windows Mobile, which means most of the cuts will come from its Symbian and Linux businesses.
"Motorola is trying to simplify its production process by limiting the number of operating systems that they support," said Fred Boxa, an analyst with IBB Consulting. "They have issues of high production costs and inefficiencies."
If Mr. Jha’s resume is any indication of the direction in which he plans to take Motorola’s handset business then one can safely assume Google’s Android will play a major role. (see Could Android Halt Motorola's Slide?)
“Mr. Jha comes from Qualcomm, where he had first-hand knowledge of the software part of the industry, so I would not be surprised if he announces a complete software revision that leaves Android as the main one still standing,” said Bonny Joy, an analyst with Strategy Analytics.
Mr. Jha was a supporter of Android, Google’s open-source operating system, while he was at Qualcomm.
Android could give Motorola advantages. It will provide a much-needed foothold in the high-end consumer market where Nokia, Apple, and RIM now battle for position. It could also give Motorola a position in the midrange of the consumer market, which it lost when its Razr lost its cachet.
But perhaps most important, Android could give Motorola an opportunity to prosper from Google’s market dynamism. Google has a number of long-range application and marketing plans in the mobile market that hinge on Android.
Motorola is now the biggest name handset maker to actively embrace Android, so any effort by Google to increase Android’s attractiveness to carriers and consumers will benefit Motorola.
If Motorola does announce a focus on Android, it would mean that the phone maker took a calculated risk on Google’s early operating system and it could reap any benefits.