Motorola’s home unit (home networks, broadband modems, pay-TV set-top boxes, DVRs) reported its second-quarter revenues were flat at $1 billion. By comparison, rival Cisco this week reported revenues for the second quarter were down 18%.
Greg Brown, co-CEO of Motorola, said the company expects the addressable market for the home operation to be down at least 10% in 2009 compared to 2008 because of cutbacks in equipment purchases by phone, cable and satellite companies.
Brown said that comparing 2009’s second quarter and 2008’s was “tough” because the second quarter of 2008 may have been the unit’s best quarter ever – what with strong DVR sales and the government mandate for cablecos to separate security from set-top boxes.
Once the economy recovers, he expects the penetration rates for digital TV, HD and DVRs to grow again. The company shipped 3.7 million digital entertainment devices in the second quarter, driven by increased sales of HD DVRs versus the first quarter. It has also shipped 650,000 WiMAX consumer-premises devices so far.
As the world knows, Motorola’s major pain is its handset (mobile devices) operations, which reported a 45% decline in revenue for the quarter to $1.8 billion, a very poor result even in a time of economic recession.
The mobile devices unit is counting on Google’s Android operating system for salvation against the onslaught of Apple, RIM, Nokia, LG, Samsung, Palm and the like.
So far, at least, Android is only on two handsets, neither of which is Motorola’s. The mobile handset market itself is in a bit of a funk with slow and even declining sales. It’s one thing to increase sales in a boom market, quite another when the pie is shrinking and competitors are fighting for survival.
Motorola hopes to have two Android-based handsets on the market by year-end. The Android launches “will get us back in the game in smartphones,” said Sanjay Jha, co-CEO and head of the mobile devices unit, speaking with analysts.
Motorola previously offered the mobile devices unit for sale but had no takers. The barrier to selling it off is made higher by the unit’s operating loss for the quarter of $253 million, although that’s better than the $346 million it lost a year ago.
The company has cut some 8,000 jobs this year, which helped it report a net profit for the quarter of $26 million, up from $4 million in the year-ago quarter.