Motorola tacks on more phone market share

Motorola’s momentum in the handset sector appeared unstoppable today as it reported yet another record-breaking quarter in which it broke the 50 million mark in handsets shipped. In addition, Motorola recovered from some of the losses in its network division from Q1, and saw both overall revenues and profits boosted over the previous year.


“This is a great start to the first half of the year,” said chairman and CEO Ed Zander said in an earnings call. “We realize—this management team—there is still a lot for us to do. … We’re still hungry, still motivated.”

Motorola shipped 51.6 million handsets between April 1 and June 30, up 53% from the same period a year early and 12% from the first quarter. By its own estimates it has a global market share of 22%, up from 21% in the first quarter. As in several previous quarters Motorola credits much of that success to continuing sales of the RAZR line, and earlier this week announced that 50 million RAZR handsets have been sold (In April Motorola said it has shipped close to 60 million RAZRs to carriers and retailers, meaning there is likely a surplus of the devices still unsold). But it also has launched several new lines of consumer and business devices, including its latest Q e-mail smartphone it hopes will pick up where the RAZR eventually leaves off.

In fact, Motorola executives said it would be inaccurate to view the RAZR as driving all of Motorola’s sales. While the RAZR is the top-selling phone in the U.S., other devices lead Motorola’s sales in other markets: the SLVR candy bar phone is a best-seller in Europe, while other devices sells well in Asia, Zander said.

Total revenues came in at $10.9 billion, up 29% from Q2 of 2005, with a 46% boost in the handset division sales to $7.14 billion. But the networks division also recovered after recording a 14% year-over-year dip in sales in the first quarter. Motorola reported $2.9 billion in Q2 network and enterprise equipment sales, up 3% over the same quarter a year ago and up 15% over the first quarter. Those sales were led by a major government contract with Portugal for a nationwide public safety Tetra radio system and a contract with Wateen Telecom in Pakistan for WiMAX. Motorola’s profits in the division, however, are still on decline. Operating earnings fell to $386 million from the $494 million reported last year.

Motorola also saw an 8% increase in sales in its connected home division to $803 million.