Motorola cuts investment in 4G

“In China in general, on the infrastructure side, it’s getting very competitive, and margins are challenged in a significant way,” Brown said. “We have a decent footprint, and we’ll look to protect it, but we won’t do anything [that doesn’t make economic sense]. We will look to compete with the carriers I mentioned in the next couple of quarters in Asia, but also, if it makes sense to have a broader footprint or business model, we are going to do that.”

China has been a bright spot for Moto in its other areas of business as well. China Unicom chose the vendor for its CDMA network roll out, and about 60% of the Asia/Pac region’s mobile device revenue was from China, Jha said. The company plans new smartphones in China in either Q4 or Q1 of 2010 to coincide with the Chinese New Year.

HANDSET SALES CONTINUE TO PLUMMET

In mobile devices, the company saw a 45% drop in sales year-over-year and an operating loss of $509 million, down from $418 million in Q1 2008. Still, with 14.7 million handsets shipped, it regained its fourth-place ranking for handset makers, barely passing Sony Ericsson, which shipped 14.5 million handsets in Q1. The company reiterated its plans to have differentiated Android-based devices in its stores in time for the fourth-quarter holiday season, although Jha didn’t expound on what differentiated meant to Moto. When asked what Moto considers its key strength compared to competitors with clear core competencies, such as Research In Motion strength in e-mail, Jha said he views messaging as being important and Web browsing as “very, very important.”

“One thing I particularly like about Android is it’s a very good mobile Internet experience and the adjacent applications Android brings to the table,” Jha said. “We also think mobility and multimedia is important. We are focused on a number of different areas now.”

Android is a good platform for Moto to leverage given the significant developer interest and number of developers out there, Jha added. Although it’s a global platform, Moto is prioritizing some regions over others. He did not disclose which regions, only saying that Moto would launch with multiple carriers in multiple regions, not just North America. Jha is confident there is enough interest in Android to create a large ecosystem for the OS without becoming commoditized, he said.

“We will base it on one platform, but we’ll obviously have time-sequence releases of that platform with additional features,” Jha said. “We are looking to consolidate to one platform and leverage that platform for multiple devices. We have the ability to scale features up and down starting from that single platform.”