Motorola is banking on LTE, new tablets as it continues turnaround

Motorola sold 440,000 Xoom tablets and 4.4. million smartphones during its second quarter, executives revealed in an earnings call Thursday, along with news that company plans to see revenue dip during the third quarter before rebounding during the fourth. Expected to help contribute to its final quarter, and planned profitability for the full year, is Motorola's plan to reduce the price of the Xoom.

"One of the advantages of being first is that you get the halo effect of going first, but also you have less time to cost-optimize," CEO Sanjay Jha said during a call with analysts. By the end of the year, the company expects profitability from its tablets to be between those of its smartphones and PCs.

During the second quarter, it saw revenue of $3.3 billion but reported a net loss of $56 million.

Come September, Motorola's planned LTE upgrade for the Xoom will arrive (CP: Verizon's Motorola Xoom 3G tablet to receive 4G LTE upgrade in September), along with its delayed Bionic 4G handset for the Verizon network. By year's end, Motorola will introduce two new 4G LTE tablets and have "at least 5" LTE devices on the market.

"It's my expectation that LTE will be a strong focus for carriers in the fourth quarter," said Jha. "I would say that we believe that we have a very good position with some of the devices that we are offering for the fourth quarter."

Motorola has focused heavily on Android, and with Google facing criticism for its shallow patent portfolio, and failure to stand up for the manufacturers supporting it, Jha also played up Motorola's own patent holdings during the call, stating:

As most of you know, we own one of the strongest and most respected patent portfolios in the industry. We have over 17,000 patents granted and over 7,000 patents pending, with particular strength in 2G and 3G essentials; non-essential patents important to the delivery of competitive products in the market place; video, particularly compression, decompression and security technologies; and finally a leading position in 4G LTE essentials. With new entrants to the mobile space resulting from the convergence of mobility, media, computing and the Internet, our patent portfolio is increasingly important.

Finally, additionally expected to contribute to a fourth-quarter turnaround is Motorola's role in the enterprise — particularly following its February acquisition of 3LM, and what Motorola says is the growing role of Android smartphones in the enterprise. (It will even offer two tiers of laptop docks — one for consumers and one for enterprise customers, who are slightly "less sensitive to pricing.")

Jha detailed Motorola's enterprise positioning, explaining, "With the acquisition of 3LM, we have the full mobile device management software, which enables any CIO to provision any Android device, not just ours ... I believe Samsung is the only exception. ... Within our client ... we have security; we have remote wipe; we have compliance to about 160 enterprise features, which is not found on a standard on an Android device — the ability to turn off Bluetooth, the ability to turn off the camera. All of these capabilities," said Jha, "we will deliver. ... We have spent a lot of time with CIOs of Fortune 500 companies to understand from them what they believe is essential for us to win."