Motorola Mobility (MMI) appears to be another victim of Samsung’s dominance in the smartphone market. The company lost $86 million in the first quarter on revenues of $3.1 billion. Losses would have been even steeper without the positive contribution of the company’s cable box business, which contributed $68 million to operating earnings. The device business, meanwhile, was awash in red ink with operating losses of $121 million.
Smartphones were a bright spot in the report. Motorola Mobility sold 5.1 million of them, a 20% year-on-year increase. More than half the mobile phones sold by the company during the first quarter were smartphones. But the company has just 10% of the US smartphone market, according to NPD, trailing far behind Apple (29%), Samsung (24%) and HTC (15%).
Most Motorola Mobility employees thought they’d be working for Google (GOOG) by now. The search engine giant has agreed to buy Motorola Mobility for $12.5 billion dollars, and has received approval from authorities in the US and Europe. China, however, must also approve the deal because Motorola Mobility’s Chinese revenue is high enough to trigger a provision requiring Chinese approval of an acquisition. China, of course, has a history of keeping much of Google’s content outside a firewall, and has yet to approve the Motorola Mobility buyout.
When Google announced the deal last summer, CEO Larry Page said that Motorola Mobility’s patent portfolio would help Google protect the Android operating system from patent infringement lawsuits brought by Apple (AAPL) and Microsoft (MSFT). Just today a judge in Germany ruled in Motorola’s favor in a patent case against Microsoft. But Microsoft is appealing the case and will not have to remove any products from store shelves at this time.
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