Lawsuits, competition weigh on Motorola

Motorola reported preliminary fourth-quarter financial results on Friday, including sales that are lower than analysts expected

The cost of patent lawsuits and a more competitive market weighed down Motorola Mobility's fourth-quarter financial results, the company reported Friday in releasing preliminary numbers.

Motorola expects to report US$3.4 billion in sales for the quarter ended Dec. 11, less than the $3.88 billion that analysts polled by Thomson Reuters were expecting. Motorola hadn't previously disclosed a forecast for the quarter. It plans to release its full financial report on Jan. 26.

Despite reporting losses for the first three quarters of the year, Motorola said as recently as October that it expected to be profitable in the fourth quarter and for the full year. On Friday, it said it had achieved "modest profitability" in the quarter, excluding certain one-time items.

The company shipped 10.5 million mobile devices in the quarter, including 5.3 million smartphones. That's more smartphones, but fewer phones in total, than it shipped in the third quarter. It didn't say how many tablets it had shipped.

It's unclear if providing a release date for its full results is an indication the company doesn't expect its acquisition by Google to be completed by then. Motorola initially hoped for the deal to close by the end of 2011 but has also said it might not close until early this year. On Friday, it said it continues to expect the acquisition to close in early 2012.

Motorola has chosen to battle some of its adversaries in court rather than agree to pay a license fees for patents. Many of its competitors, including HTC and Samsung, decided to pay Microsoft for patented technologies it says are used in their Android phones. Motorola is also fighting Apple in court.

Some experts suspect that Google agreed to purchase Motorola to be able to leverage Motorola's significant patent portfolio against Android attackers.

Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is Nancy_Gohring@idg.com

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Nancy Gohring

IDG News Service
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