Update: Looks like shipping new and cool phones like the V600 is finally paying of for Motorola. The company reported a fantastic quarter. The handset group sold 24.1 million units with ASPs at $161. With selling prices in line with the prior quarter and operating margins actually going up sequentially to 10.1% from 9.8%, Motorola doesn’t seem affected by the Nokia price cuts. MOT shipped 52% more handsets than this time last year, which is due to the underpinnings of the explosive industry and MOT’s success at focusing on the mid range, specifically, camera phones and color screens. Total revenues for the quarter $8.49 billion and earnings were 21 cents a share!
Timm Bechter of Legg Mason writes: Compelling products are enabling Motorola to prevent ASPs from falling even as both Nokia and Samsung have stated they will aggressively cut prices to maintain market share. As we’ve said before, driving product development further will help OEMs pick up market share and improve margins. 23 of the 27 handsets that were supposed to be delivered in the 1H04 shipped on time. Poor delivery records had plagued Motorola, particularly last holiday season, as it missed the Christmas shopping season with its new camera products.
My two cents: The new A630 and the V6710 are going to be big hits over next few months and keep the Moto momentum going. I still feel that it is going to have some trouble against the Asians, but Nokia is going to have a rocky 2004 and 2005.