Many have been waiting and watching for Google to get more specific about its Motorola agenda, particularly after it entered a deal to sell the Motorola Home business to Arris Group for $2.35 billion late last year. As part of its quarterly earnings report on Tuesday, Google hinted at its plans for Motorola.
Google posted $14.2 billion in earnings in the fourth quarter of 2012. Motorola, which still operates as a separate entity, contributed a loss to the quarterly results. Motorola lost $353 million in the quarter. But Google is nevertheless bullish on turning around the ailing handset maker.
"We're not in the business of losing money with Motorola," said Google CFO Patrick Pichette on the investors call. "We're 120 days into this journey, and we've inherited 12 to 18 months of product pipeline . With product restructuring, it does take time for new product to show up. Be ready for a lot of fluctuation in our P and L [profit and loss statements] over the next quarter. It's just the nature of the beast when you're reinventing a business."
Greg Sterling, principal analyst at Sterling Market Intelligence, told us that Google, having made $50 billion last year, can afford to take the long view with many of its projects (and engage in efforts that are somewhat speculative, like Google Glass). Pichette stressed, however, that the company ultimately does want to make money from those efforts.
"With Motorola, the company does have to take more immediate action that will return it to profitability and make the handsets competitive with Samsung's market-leading Galaxy phones," Sterling said. "That is a significant challenge that will require more than a focus on battery life.
"Motorola came out of the gate quickly with Android but has been overshadowed by others and specifically Samsung, with more elegantly designed phones and better marketing . It's not clear that Motorola will be able to overcome its current disadvantage without some 'special help' from parent Google."
All About X
Part of the plan may be a so-called Google X Phone, rumored to be a phone constructed with the most advanced Android hardware available. Industry watchers speculate that Google will unveil a Motorola X Phone at the company's annual Google I/O developer conference this summer.
Adding fuel to the fire, Google CEO Larry Page is speaking publicly about some of the features he believes smartphones should have. "Battery life is a huge issue," Page said, according to The Verge. "You shouldn't have to worry about constantly recharging your phone. When you drop your phone, it shouldn't go splat. Everything should be a ton faster and easier. There's real potential to invent new and better experiences."
According to the Los Angeles Times, the X Phone is not expected to be made under Google's Nexus brand, and it's expected to come with fewer pre-installed apps, which is seen as a response to complaints some people have with other Android phones.