Motorola to ship first Android phone in late 2009, delays spin-off

Motorola today announced plans to ship its first Android phone toward the end of 2009, while canceling some other phones expected to launch early next year and postponing the intended spin-off of its mobile device business unit.

As previously reported be BetaNews, Motorola started to reorganize its mobile phone organization last spring in anticipation of a spin-off, after trying in vain to produce a successor to its once-ubiquitous Razr phone.

In announcing a delay of the planned spin-off today as part of Motorola's third quarter financial report, company officials cited a combination of internal factors and the current economic crisis.


"While our strategic intent to separate the company remains intact, we are no longer targeting the third quarter of 2009, primarily due to the macro-economic environment, stresses in the financial markets and the changes underway in Mobile Devices," said Sanjay Jha, Motorola-s co-chief executive officer and CEO of Mobile Devices, in a statement.

In a conference call today, however, Jha cautioned financial investors that a turnaround for Mobile Devices isn't about to happen overnight.

"The reality is there is no good fix here," according to Jha, who was hired in August from Qualcomm -- where he served as COO -- to oversee the Motorola business unit.

The unit needs to focus beyond new products, on the "user experience," he admitted. Motorola has concentrated too much on "bright shiny objects."

Accordingly, Motorola's mobile phones division will now consolidated into three platforms: Android; Microsoft's Windows Mobile; and a "proprietary" OS for its least expensive phones.

Motorola expects to ships its first Android phone during the 2009 holiday season, according to Jha.

In late September, Motorola -- a member of the Google-spearheaded Open Handset Alliance (OHA) -- confirmed that it is working on developing Android devices. But the company hadn't said what kinds of Android devices it is working on -- or when these will be released -- until today.

In the financial results announced Thursday, Motorola reported an operating loss of $840 million for the Mobile Devices segment from July to September, even though quarterly sales of $3.1 billion for Mobile Devices were down only 31 percent from the same time frame the year before.

According to Motorola's written statement, Motorola's Mobile Devices "highlights" for the quarter included shipment of 16 new products, including three new 3G devices, along with launches of these products: the Krave ZN4, featuring two layers of touch; the Aura, a "high-tier mobile device," and three new "music-optimized" MotoKokr phones.

Motorola also noted that the $840 million operating loss this quarter "includes significant charges, primarily related to decisions and plans to consolidate silicon and software platforms and simplify the product portfolio."

Other company divisions fared better. In the Home and Networks Mobility segment, which includes digital entertainment devices such as HD/DVR, and IPTV devices, sales amounted to $2.4 billion, down just 1 percent compared to the year-ago figure. Operating earnings increased 65 percent to $263 million.

In Motorola's Enterprise Mobility Solutions segment, sales rose 4 percent, to $2 billion, and operating earnings stepped up 23 percent to $403 million.

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