In conjunction with a disappointing 3Q earnings release in which Motorola reported losses of $397 million, the company reported it would focus future handset efforts on Android and Windows Mobile platforms. Motorola also announced it was delaying its planned spin-off of its mobile unit beyond 2009.

The comments on Motorola's shift in mobile operating system (OS) strategy came during the earnings call from Sanjay Jha, Co-CEO of Motorola and CEO of the Mobile Devices unit. Jha announced that the company will no longer introduce new phones based on Symbian UIQ, nor on its homegrown MotoMAGX Linux/Java platform. Instead, it will base its smartphones and eventually its mid-market feature-phones on the Linux/Java-based Google Android platform, or on Windows Mobile.

Motorola's first Android phone, which is said by industry reports to be geared toward social networking website users, will ship in time for the 2009 holiday season, reported Jha. It will be preceded by a Windows Mobile 6.5 phone due to ship in the second half of 2009. Several weeks ago, our sister publication, eWEEK, reported Motorola's plans to expand its Android development team from 50 to 350.

The latest Motorola phones have supported the LiMo Platform, a rival mobile platform to Android. The new focus on Android could signal an end of the line for Motorola's LiMo plans. LiMo has soared for much of the year, as Android struggled with delays, but with the arrival of the first Android phone, the G1 from rival HTC, all that appears to have changed.

Motorola's most recent phone, the Krave ZN4 (pictured at top), was billed as Motorola's first Linux-based touchscreen phone for the U.S. market. It may also be one of the last Mot Linux phones to ship without an Android stack.

Handset unit continues to struggle

The Motorola earnings report announced revenues of $7.5 billion, with positive cash flow of $180 million. However, the company also announced a $397 million loss ($0.18 per share) compared to the previous year's quarter, a 15 percent drop. The Mobile Devices group, meanwhile, reported sales of $3.1 billion, down 31 percent compared to the previous year, based on the shipment of 25.4 million handsets. The mobile unit also announced an operating loss of $840 million, compared to a loss of $248 million in 3Q 2007.

Looking forward, the company plans to reduce costs by $800 million in 2009. Cuts will be across the board, says Motorola, but appear to be based in no small part on its reduction of OS development operations.

As a result of Motorola's handset troubles in particular, and the larger global recession, Jha also announced that the proposed split-off of the company's mobile unit as a new company in late 2009 would now be extended indefinitely, or at least until 2010. Meanwhile, the company will reduce the number of handsets it introduces, and focus its handset sales on the Americas and “certain Asia markets,” which Jha later seemed to concede in the Q&A, primarily means China.

The abandonment of both its MotoMAGX platform and its experiment with Symbian UIQ is not only intended to cut costs, but also to reduce complexity, said Jha. “We have had too much complexity in our product platform and system architecture,” he said. In this quarter alone, for example, the company shipped 16 new mobile products, including three new 3G devices. “We intend to reduce future investments in operating system development, and focus on product development and innovation,” he added. According to Jha, both the Android and the Windows Mobile OSes will extend beyond Motorola handsets to include “messaging and mobile Internet devices.”

Jha seemed to suggest that further earnings downturns were in store for the first half of 2009 in the Motorola handset business. “There is no quick fix here,” he said, before lauding the company's brand and engineering talent as a harbinger for success down the road.

Motorola's other device division

On the bright side, meanwhile, the other Co-CEO, Greg Brown, who is CEO of Motorola's Broadband Mobility Solutions unit, reported that “Home and Networks Mobility” sales totaled $2.4 billion for the quarter, with earnings increasing 65 percent year over year to $263 million. “Enterprise Mobility Solutions” sales totaled $2.0 billion, he said, with earnings increased to $403 million, up 23 percent compared to the previous year's 3Q.

Company-wide earnings from continuing operations in the range of $0.02 to $0.04 per share are expected in 4Q 2008, says Motorola, and full-year earnings per share are expected to be in the range of $0.05 to $0.07.

The end of an era for Linux on mobile phones?

Motorola U9

Earlier, it was reported that T-Mobile's G1 sold out its first 1.5 million pre-orders. Later, it came to light that the figure was mis-reported. Even had it been true, however, the G1's early numbers are a drop in the bucket compared to the number of Linux phones shipped over the decade by Motorola, which in more than five years of Linux phones has been by far the market leader with Linux. Widely distributed Motorola phones based on Linux include the Rokr Z6, U9 (pictured at right), EM30, and E8 music phones; ZN5 camera phone; and “iconic” general-purpose Razr2 V8. However, in recent years, the company has struggled with handset sales, primarily due to marketing missteps, as well as the aforementioned “complexity.”

The Motorola earnings conference call webcast should be available for replay, here.

 
This article was originally published on LinuxDevices.com and has been donated to the open source community by QuinStreet Inc. Please visit LinuxToday.com for up-to-date news and articles about Linux and open source.