updated 04:55 pm EDT, Thu October 27, 2011
Motorola Q3 2011 shows tablet sales collapsing
Motorola Mobility pained a dark picture for its tablet strategy with its results on Thursday. The company shipped just 100,000 Xoom tablets in the summer, or less than a quarter of the 440,000 from the spring and less still than the 250,000 from the winter launch. Motorola gave no explanation for the drop.
Its cellphone performance was better but modest. A total of 11.6 million phones shipped, 4.8 million of which were its Android smartphones. The results were much improved over a year earlier, when it delivered 9.1 million phones and 3.8 million smartphones, but was only a modest increase over the spring, when it moved 11 million cellphones, 4.4 million of which were smartphones.
The split-off mobile company wasn't yet profitable and posted a net loss of $32 million, only slightly better than the $34 million the pre-division mobile group lost last summer. Its revenues were an improvement at nearly $3.26 billion. Some of the profit drop came from $18 million in costs related to the proposed Google takeover of Motorola.
Company chief Sanjay Jha pointed to most of the growth coming from outside the US as well as to non-mobile products like its home technology. He put most hope on the Droid RAZR and the merger, but didn't have an update. In a very rare step, Motorola declined altogether to hold a conference call for the results, possibly to avoid questions about either Google or its sluggish tablet sales.
The poor showing for the Xoom has it faring even worse than the BlackBerry PlayBook in recent months. RIM's tablet was already considered in trouble after the company shipped just 200,000 PlayBooks. While Motorola has more overall sales, its performance is in stark opposition to the assumptions it, Google, and Verizon had that the Xoom would repeat the success of the original Droid phone from 2009, including help it was supposed to have had from a Super Bowl ad.
Several factors have commonly been attributed to the Xoom's failure to catch on. A decision to ship only the 3G version first and price it at $800, $70 above a similar iPad, automatically limited its audience. Google's rush to have a tablet-native Android alternative to the iPad also led to promised features taking months to arrive, including Adobe Flash, 4G, and SD card support. Lately, Motorola has taken to cutting the Wi-Fi Xoom to $379 to spur sales and only now has all the features that it planned in January.