After several messy years, it looks like Motorola (MOT) is starting to show signs of recovery. The company posted a surprise third-quarter profit today, and its forecast for the important holiday season is solid.
More importantly, it has been able to release two new smartphones — on time — based on Google’s (GOOG) Android operating system, which represent the future of the company.
Before now, Motorola was TERRIBLE at smartphones. Remember the disaster that was the Q? If it can keep cranking these out, that’s a great sign for the future.
Why are smartphones so important to Motorola’s comeback?
- They’re the fastest-growing part of the mobile industry.
- Smartphone makers can make HUNDREDS of dollars of profit per device sold, versus “dumb” phones, where margins are much slimmer.
Yesterday, Motorola officially unveiled Droid, a phone that Verizon Wireless will use as its one of its main holiday smartphone “heroes” — if not its only hero — as it competes with Apple’s iPhone for the third straight Christmas. (Verizon’s archrival AT&T has an exclusive to sell the iPhone in the U.S., for now.)
That the largest U.S. carrier is using a Motorola phone to combat the iPhone — complete with massive ad campaign — is nothing short of AMAZING for Motorola. Even six months ago, few would have guessed it. (And it’s a loss for rival Research In Motion, whose BlackBerry Storm 2 appears to be Verizon’s second-favourite smartphone this Christmas, after serving as top dog last year.)
Based on first looks, Droid seems to be quite good. It has the basics down — it works, etc. — and even some extras. The New York Times‘ Saul Hansell, who seems to have a review unit on hand, tweets one smart, nice-to-have feature: “iPhone headphones work on the Droid, and they even stop & start music in apps.”
Our impression, based on what we’ve read: It’s not as well-rounded as the iPhone, and doesn’t have nearly the app ecosystem to support it, but it’s probably pretty good. (Not supporting multi-touch gestures is a let-down, but that’s as much Google’s fault as Motorola’s.)
This is much better than anything we could say about a phone that Motorola shipped since… a long time ago. And because Verizon needs to sell smartphones just as any other mobile carrier, the Droid should probably sell quite well.
Longer term, Motorola will still have to figure out how it’s going to differentiate itself from the plethora of phone makers who have gone deep with Android, such as HTC, which is particularly impressive. But for now, a solid step forward.
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