It’s no secret that Android is the fastest growing mobile OS period. There seems to be at least one, if not more new Android devices released, announced or rumored every week. This intense drive, and growth in the Android ecosystem has really changed the playing field. Motorola, who was key to the success and early adoption of the Android operating system, seems to be struggling to stay at the top spot, and now Wall Street has chimed in.
Analysts are growing concerned about the delay Motorola has had in releasing 4G/LTE devices, after all HTC, Samsung and LG have all released a 4G/LTE compatible Android device on Verizon Wireless and while there were delays at the onset of each release (except for LG) all three handsets seem to be doing quite well. Motorola stood alongside HTC, Samsung and LG in January when they originally announced the Droid Bionic and the Motorola Xoom with a 4G upgrade.
More after the break
Of course the delays have caused doubt in the tech enthusiast, Android enthusiast and early adopter community but now the Analysts have taken note. As Forbes has pointed out, RBC Capital Market’s Mark Sue downgraded Motorola’s target price from $33 to $27 just this past week. In an investor note released this past Thursday Sue warns “…Motorola’s missing out on the fast-growing LTE segment of Android,”
Motorola Mobility CEO Sanjay Jha recently told the Merill Lynch/Bank of America, technology conference that Motorola was having a problem with their packet stack and Verizon’s 4G/LTE network. Jha also said that the problem has been resolved and they’re looking forward to releasing 4G/LTE products on Verizon. He specifically mentioned 2 products without naming them, however we are confident it’s the two products in this piece.
Sue speculated that Motorola’s delay in 4G/LTE devices for Verizon was because Motorola was producing their own silicon for LTE. The HTC Thunderbolt and Droid Charge both use LTE chips developed by Qualcomm. The LG Revolution uses a cellular chip by Qualcomm and uses their own L2000 Cellular Baseband for LTE. This is the same cellular baseband found in LG’s LTE dongle which was released as the onset of Verizon’s 4G/LTE network, which gave LG a jump start on the technology. (source: Aandtech). To help with Motorola’s LTE developments they recently ran an announcement looking for LTE engineers, which will hopefully ramp up 4G/LTE products at Motorola.
Sue also cites Motorola’s “aging product portfolio” as another reason he downgraded the stock. Although Motorola has recently seen an influx of new phones to market, some of the key devices, recently released were just remakes of previously released devices. The Motorola Droid X2, was for all intents and purposes a minimal hardware upgrade and processor change. The Motorola XPRT on Sprint was a re-release, with tweaks, of the Motorola Droid Pro on Verizon Wireless. The Motorola Photon 4G, is again, for the most part, a remake of the Motorola Atrix 4G on AT&T.
Tim Long, an analyst with Bank of Montreal Capital Markets, has downgraded Motorola to an “underperform” rating. Long wrote in an investor note this past week We expect [Motorola] to show much less growth than the other Android players…we believe the Android market has become much more competitive and margins may come under pressure,”
Analysts who were concerned with Motorola’s tight ties to Verizon Wireless in 2009 when the original Droid came out and then later when the Droid X was released in 2010, have echoed those thoughts saying that Motorola only released mid-tier handsets on both AT&T and Sprint. That problem was rectified on the nation’s second largest carrier earlier this year with the release of the Motorola Atrix 4G however, like the Motorola Xoom on Verizon, most analysts believe the Atrix didn’t fare well either. Jha said they have a reinvigorated relationship with Sprint which included releasing the Motorola Photon 4G, later this month. But again, that’s really just a remake.
Motorola’s 7th device in the Verizon Wireless Droid line up was released this week. Motorola and Verizon are billing the 3G only Droid 3 as the thinnest phone with a slide out keyboard. Although it’s dual core, it’s not 4G. Motorola saw amazing success with the release of the original Motorola Droid. The original Motorola Droid X did very well too however the following 3 Droid’s by Motorola didn’t fare quite as well. The Droid 2, Droid 2 Global and Droid pro never saw the thunder (or the ad campaigns) that the original Droid and Droid X saw. The verdict on the Motorola Droid X2 is still out.