Motorola is limiting future handset launches to devices based on the Windows Mobile or Google Android platforms, the company said today.
During an earnings conference call this morning, Motorola co-CEO and handset division chief Sanjay Jha said that concentrating on two mobile operating systems will cut production costs and improve the customer experience. Previously, Motorola had offered devices based on several platforms including its own Motorola OS, Windows Mobile, Symbian and the Linux-based MOTOMAGX, he said. The shift to Windows Mobile and Android means that the company will cancel some of the handsets based on other operating systems that it had planned to launch in the first half of 2009.
Streamlining Motorola's handset production will save the company $600 million in 2009 while reducing the total number of products the company will release in the first half of the year, Jha estimated. The company's volume of handset shipments will steadily increase throughout the year, however, as the company develops a broader range of Windows Mobile handsets, as well as when the company launches its first Android-based handset sometime in the fourth quarter of 2009, he said.
By whittling down the number of operating systems used on Motorola devices, Jha is betting that Windows Mobile and Android will be the two dominant mobile platforms for the foreseeable future. Shifting handset production to these two platforms will take time and money, but it will make the company's handset division much more profitable in the long run, he said.
"There is no quick fix," Jha acknowledged. "We will reduce the number of products to launch in 2009 as compared to what we've planned, and that will make the first half of next year challenging."
Motorola's mobile-devices segment reported an operating loss of $840 million for the third quarter of 2008, more than three times the $248 million loss it reported in the third quarter of 2007. The segment also reported third-quarter sales of $3.1 billion in 2008, a decrease of 31% compared to third-quarter sales in 2007. Motorola currently has the third-largest share of the mobile-phone market, trailing Nokia and Samsung.