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Can Android’s rising tide lift Motorola?

Google’s “predatory distribution of Android” at below-cost makes it difficult for other OS providers to compete, said Fairsearch

Android’s march towards market dominance continues apace with reports from ABI Research that the collective share of the smartphone market held by Android-based phones has increased from four per cent to 24 per cent in the past year.

As smartphone shipments grew from 177 million in 2009 to 302 million in 2010 (a 71 per cent growth rate), ABI’s Kevin Burden said “the market has been disrupted during a period of record growth.” According to ABI, the rise of Android has seen the number of handset OEMs with significant smartphone market share increase in 2010.

All of this could be good news for Motorola, which has nailed its hopes for survival firmly to the Android mast. The company has admitted that its future hinges on the continued growth and success of Android-based smartphones – a risky all-your-eggs-in-one-basket strategy made all the worse by its admission on Tuesday that more than a quarter (28 percent) of its revenues came from sales to just one network operator, Verizon Wireless. Without any long-term exclusivity arrangements in place for Motorola, Verizon’s recent move to offer the iPhone is no doubt adding to concerns.

Motorola Mobility, a recently-formed spin-off of Motorola, posted a GAAP profit of $80 million for the fourth quarter of 2010, compared with a loss of $204 million the previous year. Earlier this year, the firm announced that it expected to post a net loss of between $26-62 million in the first quarter of 2011.


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