Motorola reported its first-quarter earnings Thursday, noting that mobile device sales dropped a staggering 45 percent to $1.8 billion from the quarter one year ago. This comes after device sales dipped a massive 51 percent in the fourth quarter compared to the previous year.
During the first quarter of 2009, Motorola shipped 14.7 million handsets, down about 23 percent from the fourth quarter of 2008, capturing what it estimated as a 6 percent market share.
The mobile device sales slide is just one part of Motorola's grim picture. Overall, companywide first quarter sales fell 28 percent to $5.4 billion, from $7.5 billion last year.
With its device business, which was once its premier segment, spiraling further downward, Motorola said it will hang its hat on Google Android in hopes to capture back market share and regain traction in mobile devices.
Motorola is expecting to offer Android-based devices in various regions on multiple carriers. Additionally, Motorola said messaging and social networking will be key capabilities of its lineup of Android smartphones.
The Android focus is part of Motorola's device division's overall cost-cutting effort, which includes weeding out low-cost devices after failing to compete against Nokia, LG and a host of others. Earlier this year, Motorola said it would turn its focus to Android and to building mid- to high-end devices, while phasing out its low-cost mobile phones.
"In the quarter at Mobile Devices, we implemented aggressive actions to reduce costs and also gained solid traction on improving operational effectiveness," said Motorola co-CEO and CEO of Mobile Devices Sanjay Jha in a statement. "Customer feedback on our smartphone road map remains very positive, and we plan to have differentiated Android-based devices in time for the fourth-quarter holiday season."
Jha added that Motorola was able to reduce its Mobile Devices operating loss in the first quarter, compared to 2008's fourth quarter. Meanwhile, Jha said Motorola has increased its 2009 annual cost-reduction target to more than $1.3 billion.
Motorola is late to the Android table. By the time its Google Android-based devices hit the market, the T-Mobile G1, which was the first publicly available smartphone to run Android, will be more than a year old. And HTC, the G1's manufacturer, is expected to have additional Google Android handhelds on the market later this year. Motorola rival Samsung also has big plans for Android, along with other device makers, including Sony Ericsson.
Along with its high hopes for Android-fueled salvation, Motorola has plans to work with Microsoft to build up its Windows Mobile offerings, with new devices expected as early as this fall.
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