Verizon iPhone fallout begins: Motorola warns of first-quarter net loss, shares fall

Motorola Mobility Holdings, Inc. (MMI) today reported net revenues of $3.4 billion in the fourth quarter of 2010, up 21 percent from the fourth quarter of 2009. The GAAP earnings in the fourth quarter of 2010 were $80 million, or .27 per share, compared to a loss of $204 million, or .69 per share, in the fourth quarter of 2009. On a non-GAAP basis, earnings in the fourth quarter of 2010 were $108 million, or .37 per share, compared to a loss of $70 million, or .24 per share, in the fourth quarter of 2009.

The Company’s outlook for the first quarter of 2011 is for a net loss of $26 million – $62 million, net loss per share of $0.09 – $0.21.

Sinead Carew reports for Reuters, “[MMI] shares fell almost 4 percent after it warned it would revert to a loss again in the current quarter, as it faces new competition from the Apple Inc. iPhone.”

“Motorola said it shipped 11.3 million phones in the quarter, including 4.9 million smartphones,” Carew reports. “The average estimate was for sales of 5.2 million smartphones and total shipments of 10.7 million, according to six analysts contacted by Reuters.”

Full article here.

MacDailyNews Take: Bloodbath.

14 Comments

  1. Actually, I was thinking about this and realized it is so much fun because after enduring decades of derision as a Mac user, the chickens have come home to roost, the tide has turned, revenge is a dish best served cold, wisdom is known by her children and the Mac-universe is turning into a self-sustaining miracle of never-ending growth, prosperity and eternal joy.

    At least for a while.

  2. Proof that BOGO sales of phones does not lead to profit, or profitability.

    It would seem that these guys honestly think that they can “make up for it in volume.” Truly there is a demand for smart phones, but no one can legitimately compete with the iPhone on equal footing. The LGs, Samsungs and Motorolas of the world are pushing what I would call “percentile” phones, which arguably have a “percentile” of the fit, finish, features, functionality, etc. of the iPhone. (I’m not going to venture any numbers!)

    Some have a singular feature, used as a sales cudgel, which in some way seems to exceed the similar feature in the iPhone, e.g. higher MP camera, 1080p video recording, dual-core processors, etc. The trouble is, when people have used both, the majority quickly realize that they prefer iPhones. The customer knows it, the sales guys know it, and the competing manufacturers know it. How to compensate? Two 50% phones don’t make a 100% phone. Two 75% phones don’t make a 150% phone, but BOGO does make the sales guys a whole pile of cash, because at the end of the day, the subsidized phones are costing the customer much the same but cost substantially less to produce. Who pockets the money? The sales guy? The phone provider? Both? One thing is certain, it obviously isn’t Motorola.

  3. I was reminiscing how fun my very first cell phone was, a Motorola, even though it was a brick and did nothing but phoned, it was special like the Commodore. Years later when the RAZR was all the rage but I saw how much better the quality and system other guys are getting, I knew Moto was in trouble. The trap of success. What a shame.

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