Motorola posts shock loss; looks to Android for comeback

Faced with a sea of red ink and a bare product pipeline, Motorola is pinning hopes to new models that will run on Google’s Android OS, pegged for New Zealand release this year.

Motorola today said it would refocus on the high-end of the cellphone market, developing handsets that will run on Android this year (making Motorola the first A-list phone maker to back Google’s open source mobile OS), and Microsoft’s Windows Mobile (which already powers the Q) in 2010.

Motorola's NZ National Sales Manager Scott Stevens earlier told NBR that "New Zealand will have the option to range Android-enabled devices, and Motorola will be introducing handsets supporting the Android operating system in the second half of 2009."

Most high-end Motorola phones have previously run on Symbian, the mobile OS that was formerly collectively owned by the major phone makers but bought outright by Nokia last year.

The market was unconvinced, with Motorola’s shares were down 10.75% in late trading on the Nasdaq.

Motorola’s Android play came on the back of shocking results.

The company this morning announced a December quarter loss of $US3.58 billion today ($US1.57 a share), or $1.57, compared to a net profit of $US100 million ($US0.4) a year ago, or 4 cents a share.

Analysts had been expecting the company to break even, but expenses related to laying off around 10% of its workforce, plus goodwill charges, pushed a $US0.01 loss excluding charges to a multi-billion blow-out.

Revenue fell 26% to $US7.14 billion from the year-ago quarter’s $9.64.

The company also announced that it was suspending its dividend.

In trouble even before the recession began, Motorola had just two major phone releases in New Zealand last year, the Q smartphone and a refresh of its Razr – once seen as iconic, but now slipping against new models from a resurgent Nokia, Samsung and fast-rising LG.

The company’s limited product line-up worldwide comes amid changes in executive management; on-again off-again restructures; and internal and external debate over whether the company should sell its cellphone division.