Motorola Cuts Could Be Bad News for Windows Mobile

motorolaqMotorola will soon lay off as much as 50 percent of its handset division, according to mobile industry blog, PhoneScoop, citing an unnamed source said to be familiar with Motorola’s plans. The post also claims that Motorola (s mot) will skip the CTIA Wireless trade show in April, and will slash the number of new phones it releases this year down to a dozen. And going forward, at least according to PhoneScoop, the company will only make Google (s goog) Android-based smartphones. (Microsoft has already removed Motorola from the list of Windows Mobile smart phones on its website.)

“We don’t comment on rumors,” a Motorola spokesperson said when questioned about the veracity of this information. A quick glance at the track record of Motorola’s money-losing handset division over the past two years will show, however, that it’s in dire need of some sort of resuscitation.

But while Nokia (s nok), Samsung and LG are poised to benefit from a decision by Motorola to limit its offerings, such a move to bet solely on Android would not be so good for Microsoft (s msft) and its Windows Mobile OS. Last year, I pointed out that Andorid was going to become a thorn in Microsoft’s side and would cause more problems for Windows Mobile than it would impact other smartphone vendors. To date, Motorola, Samsung and HTC have been the three major vendors pushing Windows Mobile smartphones, so Motorola’s withdrawal is likely to be acutely felt in Redmond. HTC, another Microsoft loyalist has planned quite a few new Android-based phones for 2009, ones that are being welcomes by phone companies as well.

Then again, maybe Microsoft already knows about Motorola’s rumored plans. If so, it would lend weight to the software company’s recent (grandiose) claim that it wants to limit the number of vendors to whom it licenses its operating system. “I’d rather have fewer devices and be more focused,” Todd Peters, V-P of marketing for the Windows Mobile division, told The New York Times, because it allows phone makers to get better “integration” between the phone and the operating system. Sort of like RIM (s rimm) and the iPhone, I guess. Microsoft will make some sort of a major announcement in Barcelona next month. The word on the street is that they will be showing off Windows Mobile 7.0.