Motorola and Apple report profits

Two high items in the news last week caught my attention. The first was the Q3 earnings report from Motorola. As a former employee, I still have more than a passing interest in Motorola’s performance. Third-quarter sales of US $5.8 Billion were up year-over-year - the first growth quarter since fourth quarter of 2006. Net earnings in the third quarter of 2010 were $109 million. So Motorola is profitable.

Looking a little bit closer, the Mobile Devices division had sales of $2.0 billion that including shipping 9.1 million handsets, of which 3.8 million were smartphones. In fact a total of 22 smartphones were introduced by Motorola during 2010. Overall that yielded the division a GAAP operating loss of $43 million. But how did they stack up against Apple's iPhone sales?

In Q3, compared to Motorola's 3.8 million smartphones, Apple shipped 14.1 million iPhones up 90% from the same period last year when 7.4 million units were sold. According to International Data Corporation (IDC) Worldwide Mobile Phone Tracker, this has propelled Apple to number 4 mobile phone vendor in terms of market share comprising 4.1% of the market. The top 3 are Nokia, Samsung and LG with 32.4%, 21% and 8.3% market share respectively. During my time at Motorola from 1999 to 2007, the former market leader was mostly #2 with market share ranging from 10%-20%.

So in conclusion, while Motorola's handset division may have finally turned the corner, with a market share of approximately 2.7%, Motorola still has a lot of catching up to do on its rivals.